National Launching Speech

Ucapan Y. Bhg. Dato Haji Zainuddin Hj. Bachik, Pengerusi, Persatuan Kebangsaan Pembeli Rumah, Malaysia pada hari pelancaran

02 November, 2002

The launching ceremony of the National House Buyers Association which you will soon witness this afternoon opens another chapter with a new dimension in the history of the progress and development of the Association. Consequent to the upgrading of its status, liaison committees will be set up in the States to deal with house buyers’ complaints.

Although the Association will have wider areas to cover, it will certainly never cease in its pursuit with continued vigour in search of improvement for the protection of house buyers’ rights under the laws and regulations governing the housing industry in this country.

In countries like Malaysia where the housing industry is susceptible to deceits and dishonesty displayed by some developers, tough laws and rigid enforcement must run parallel to each other to curb the cancerous growth of the contemptible practice.

A deterrent legislation to nab offenders may loose its luster and become ineffective if it is not strictly and impartially applied.

An Act should be made to serve its ultimate purpose with the minimum of delay once it has been passed by Parliament. On the contrary its original good intention to forestall infringement will be at jeopardy thereby creating more public frustration and eroding their confidence.

It was regrettable that our local housing developers did not aspire to imitate the moral values set by their counterparts in the developed countries where they competed to excel each other in producing quality workmanship lest their reputation would be at stake.

Every individual player closely linked with the building industries in those countries observe the code of work ethics and their professionalism and as a result no stringent laws were required to monitor and control their operations.

Our present system of sales and purchase houses merely by looking at the building plans spells disaster and breeds distress to house buyers because of the crookedness of the developers taking advantage to cheat innocent and unsuspecting house buyers.

To justify the costs of public money involved in maintaining an enforcement service, developers who had committed offences should be prosecuted and appropriately charged in accordance with the severity of the case if the present system of selling house i.e. sale off plans that had been aggressively abused were allowed to continue.

Small developers with limited cash flows and financial back up should only be permitted to take on small projects to match their capabilities or merge with others to form a consortium of builders to undertake projects requiring huge capital outlay.

The ‘build then sell’ concept has proven to be the most ideal and is practiced in most developed countries and one that can circumvent problems that may arise to house buyers under our present system of sales and purchase of houses. Even the People Republic of China practices the same concept. Our recent visit by our Secretary General to Hangchow city reveals abundance of completed apartments and condominiums; where all developers toe the line to have a paid up capital of RMB 2 million equivalent to Ringgit Malaysia 1.0 million. The government don’t have problems with developers because they adhere to the concept.

Under this concept, a house buyer need only to pay the initial booking fee of 10% of the purchase price of the house and the balance of 90% will be collected when the house has been completed and ready for occupation either from the house buyer’s own fund or a loan from a bank. No other payments are required during the period of construction, thus saved house buyers from paying interests.

Preference for this concept to be implemented in this country was based on a few local developers utilizing the concept who had successfully sold their units upon completion of the projects leaving no units unsold or properties overhang as predicted and feared by developers and the financial institutions that provided the bridging finance.

Here, house buyers do not have to share the risk of the developers business which apparently seemed to be.

The overall merits of the concept far outweighed its shortcomings as buyers would have the opportunity to view and make an appraisal of the newly completed house before making their final decision to purchase. It would then be a straight forward procedure between willing buyers and willing sellers without incurring animosity or hassle between them subsequently.

HBA had always been advocating for the ‘build then sell’ concept and would urge the authorities to seriously look into and consider its positive aspects by promoting and providing incentives to housing developers to adopt the system. Potential house buyers too could play their role to depress the housing market by preferring to buy only readily built houses or condominiums.

HBA would like to express its great appreciation to YB Dr Tan Kee Kwong, the Deputy Minister of Land and Cooperative Development for his valuable donation and consent to officiate at the launching of the National House Buyers Association and for his deep interests in its activities to ensure protection for house buyers’ rights.

Thank you.

President of National House Buyers Association,
Datuk Zainuddin Bachik