Revival of Failed and Abandoned Projects - Protection for Property Purchaser? (Part One of Three)
Recently, our Honorary Secretary-General, Cr Chang Kim Loong AMN presented a paper at the just concluded National Housing & Property Summit, 2009 at one of the boutique hotels in Petaling Jaya entitled ‘Revival of Failed and Abandoned Projects- Protection for Property Purchaser’: the buyers perspective.
The gist of the text is summarized for the readers to digest and to understand the plights of the victims and the anger embroiled within.
PROTECTION – WHO PROTECTS PURCHASERS?
There are various legislations that govern the construction and development activity, however, house buyers’ first connection with the law is Act 118 Housing Development (Control & Licensing) Act, 1966 and its Regulations where the statutory forms for contracts of sales are prescribed. The house buying public naively believed that they are ‘protected’ when buying through licensed housing developers. ‘Protection’ or ‘Better Protection’ – those are the key words often heard when the housing laws are amended or changed.
After the December 2006 amendment of Act 118 and implemented 12.4.2007, the long Recital now reads “An Act to provide for the control and licensing of the business of housing development in Peninsular Malaysia, the protection of the interest of purchasers and for matters connected therewith.”
In the ‘Huraian’ semasa meminda Akta this is what it’s stated “Bertujuan untuk meminda tajuk panjang Akta 118 untuk menyatakan dengan jelas dan menekankan bahawa maksud dan tujuan sebenar Akta itu termasuk melindungi kepentingan pembeli”
Why then do we see reports in the media of house buyers’ complaints? Invariably, better protection for house buyers are for future purchasers from the time the amendments are in operation, albeit with exceptions but old problems persist and are still haunting us and there is an urgent need to address the old problems. The complaints you see or hear today will continue to be of ‘old’ problems until they are all satisfactorily resolved.
CYCLE OF COMPLAINTS
It is not beyond a doubt, that not all newly built homes are ‘perfect’. The difference is in the attitude of the developers. The responsible ones would immediately addressed and rectify any complaints by their purchasers. The irresponsible and wayward ones would rather play hide and seek with their house buyers and leave their problems to be solved by others.
If you care to check newspaper archive, complaints from house buyers remain the samethroughout the decades but for different projects and their developers. From our complaints record, a chain of mounting complaints is always expected from irresponsible developer. For example, a project not delivered on time will also have complaints of developers not attending to rectification of defects promptly.
These are the cycle of the major complaints we have received from house buyers:
- Manner of delivery of vacant possession not complied with (in total or in part)
- Defects not rectified promptly;
- Defects in common property;
- Delays in obtaining CFO after vacant possession has been given;
- No connection of water and electricity in spite of Certificate of Fitness for Occupation being issued,
- Deviation from approved building plans;
- Non application or delivery of individual / strata titles (PTG cannot possibly issue titles, if the developers do not first apply) and
- Management and maintenance issues of stratified property, common facilities and common property problems, etc.
All these problems of new homes have financial effects on house buyers, however, all these complaints pale in comparison with the devastating effects of abandoned projects. No house buyers have been told that their purchase is not guaranteed to be delivered!
(See Attachment 1: “Completion not guaranteed” by HBA published in IProperty Issue 41 July 2008)
‘Completion Not Guaranteed’ by HBA published in iProperty.com Issue 41 July 2008. Find the article online at http://www.iproperty.com.my/news/264/Completion-not-guaranteed
If you are a smoker - ‘Amaran’ with horrifying graphics are now pasted on every cigarette box. We believe the same ‘Amaran’ with graphics of abandoned project be pasted on each and every contract of sale. That way you can tell buyers then that they have been warned and not get announcements like this: “Abandoned housing project ‘not Govt fault’ Source: New Straits Times, 26/05/2008.
No research has been done on the losses buyers have to bear with their problematic purchase. Buyers in abandoned projects are burdened with the repayment of bank loans while continuing to pay rents. Not only their plans to own homes get derailed, indeed, in many cases the future is indeed bleak due to the continuing piling up of interests on the housing loans that they have taken and that the banks had disbursed on their behalf, to pay for the abandoned houses. This is not only unfair, it isdownright unacceptable and disgusting. How do we expect those who are directly facing such situation to stomach it whilst their developers go scot-free?
Three years ago I read in the newspapers that a Magistrate’s Court passed sentence on a boy who stole from a public phone of RM4.70 sen to six months jail whilst developers who ‘stole’ millions and made buyers suffer financially and emotional go unpunished. And we are talking about 21st century Malaysia, a caring society!
An average working person who buys a house does not have the faintest intention or expectations to be involved in any form of litigation or to be forced to seek remedy from the Housing Tribunal to enforce his legitimate rights. Buying a house is to the average man, the most precious investment he can make.It is indeed very cruel and unjustifiable when such a noble intention turns into a living nightmare. It should not be forgotten that for every buyer involved in a problematic housing project, there are three or more people (who are their dependents or family members) who will invariably suffer the consequences as well. To help resolve the problems of victims of abandoned housing project, one must understand what a victim goes through.
(See Attachment 2: “House Buyers Frustrations” by HBA, published in IProperty, Issue 45, November 2008)
‘House Buyers Frustrations’ by HBA, published in iProperty.com, Issue 45, November 2008. Find the article online at http://www.iproperty.com.my/news/680/House-Buyer-Frustrations
The National House Buyers Association is a voluntary, non-governmental organisation that strives to protect house buyers' rights and interests. For more information, visit: www.hba.org.my
NATIONAL HOUSE BUYERS ASSOCIATION [HBA]
No. 31, Level 3, Jalan Barat, Off Jalan Imbi, 55100, Kuala Lumpur
Tel: 03-2142 2225 | 012- 334 5676 | Fax: 03-22601803