On your hunt for the perfect place, you may have come across the terms SoHo, SoVo, and SoFo. It can be confusing for those who are unfamiliar with property jargon, so let us break it down for you!
Here are the differences between SoHo, SoVo, and SoFo properties, and the key factors to consider before diving in headfirst.
What are SoHo, SoVo and SoFo properties?
SoHo, SoVo and SoFo properties are commercial landed properties intended for commercial use. For that reason, these properties are usually in strategic locations near shopping malls and public transport like MRTs. You can also distinguish SoHo, SoVo and SoFo units by their low prices and relatively smaller area (37sq.m. to 74sq.m.).
If you’re wondering about the history of these properties, it all began in 2007. The state government passed the Strata Titles Act to cover stratified landed development under Malaysia’s Housing Development Act (HDA). This gave developers the green light to develop small units in high-density locations, leading to the birth of SoHo, SoVo and SoFo properties!
The purpose of each type of property differs. SoHo stands for Small Office Home Office, and you can use it as either a living space or an office. SoHo properties tend to attract single individuals, newlywed couples, and young professionals. It can also accommodate small businesses comprising one to ten employees. Some SoHo units in Malaysia include SoHo Suites at KLCC and Arcoris SoHo in Mont Kiara.
SoVo refers to Small Office Virtual/Versatile Office, which you can only use for commercial purposes. The owners of SoVo properties cannot stay overnight if the management prohibits them from doing so. This type of property best suits small businesses or start-up businesses. Examples of SoVo units are SoVo at D’sara Sentral and Kiara 163 SOVO.
Last but not least, SoFo are Small Office Flexible Office properties. As its name suggests, it is the most flexible of the three to transform into an office, a living space, or both. SoFo properties appeal to self-employed individuals, couples, and small businesses alike. An example of a SoFo property is Infinity Tower in Kelana Jaya.
Since it is for residential purposes, SoHo properties mostly come equipped with the usual facilities of a home – a living room, bedrooms, and fully-fitted bathrooms. On the other hand, SoVo properties come with telecommunication and infrastructural facilities, making commercial activities all the more convenient.
SoFo units have the most significant advantage here as owners can customise the unit however they want. They can shift or remove the internal partitions, making way for extra beds or more furniture. Besides that, some SoFo owners enjoy the privilege of combining two adjoining units for a bigger and more comfortable space.
3. Legal Status
Arguably the most important difference between the three properties is their legal statuses. SoHo properties fall under the HDA, while SoVo and SoHo properties don’t. This is because SoHo properties are recognised as liveable homes under Section 3 which states that they may be “adapted or intended partly for human habitation or partly as business premises”.
So, while you must sign a standard Sales and Purchase Agreement (SPA) for SoHo properties, you must also sign a non-standard SPA with the developer if you wish to purchase SoVo and SoFo properties. The developer’s lawyer typically drafts these non-standard agreements unregulated by the act. Thus, it is vital that you scrutinise the agreement closely to ensure nothing is comprising your rights.
This also means that any disputes regarding SoHo properties are settled by the Tribunal for Homebuyer Claims. Conversely, disputes regarding SoVo and SoFo properties have to be settled in court in accordance with the agreement.
Some of the benefits that entitle SoHo property owners include a defect liability period which usually lasts about two years, wherein the developer is responsible for any construction faults. Besides that, the developer must pay a penalty for any delays in the project. SoHo property owners may also enjoy exemption from Real Property Gains Tax (RPGT) while SoVo and SoFo property owners may not.
Things to Note before Buying a SoHo, SoVo or SoFo
The commercial title that comes with SoHo, SoVo and SoFo properties translate into more expensive utility bills, parcel rent and commercial assessment rates. For SoHo unit owners though, there may be a way out. TNB and Indah Water rates for SoHo units may be converted from commercial to residential rates, which are significantly lower. To do this, owners will have to apply either individually, or through a management corporation (MC) or joint management body (JMB). Cross your fingers, as the result varies with each case.
Another thing to look out for is the developer’s agreement with the bank. The maximum financing margin for commercial-titled properties may be lower than usual, and the loan tenure may be shorter as well. On a more positive note, SoHo, SoVo and SoFo owners are not subject to the residential property loan term that limits the maximum margin of financing to 70% for the 3rd property onwards.
We hope we helped you learn the differences between the three properties! Each has its advantages, so we suggest thinking about what you really need before making a decision.
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