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Presented by President of National House Buyers Association (HBA),
Dato’ Hj Zainuddin bin Hj Bachik
at the National Housing & Property Summit
“Revitalising the Property Section as a Key Engine of Growth”
27 & 28 March, 2003, Mutiara Hotel Kuala Lumpur

A. Introduction

Mr. Chairman Sir, Learned Audience, the Academicians, Ladies & Gentlemen, the Organizer;

Thank you very much for inviting HBA to this forum.

HBA was setup in 1999 by a group of aggrieved house buyers and is officially registered under the Society Act. HBA is a voluntary, non-profit, non-political, non-governmental organization manned by volunteer members. Our objective is to strive for the rights and interests of other house buyers.

In this august assembly of people who are experts in their own field of profession in the housing industry, HBA humbly seeks your patience to expound our views on the unsatisfactory state of affairs in the industry as shown from first hand experience and the experiences of the numerous house buyers who have lodged complaints with us.

My talk today would dwell on three (3) important issues that require the prompt attention of industry players and the relevant authorities to put things right before they get out of hand.

1. What House buyers expect from developers.

Problems of house buyers due to lack of enforcement of the Act

The history of large scale housing for the public dates back to the early days of independence when there was an increasing demand from the fast growing population. Hence it was not surprising that in an environment of lack of regulatory institution some developers even build houses on agricultural land. The Housing Developer (Control and Licensing) Act was enacted in 1966 with the objective of instilling some orderliness into the fast growing housing industry. That was 37 years ago. What is surprising is that today, we still come across similar cases.

We question as to how and why such shocking phenomena can still exist today.

Was it due to the blatant disregard for land usage as defined in the Land Code?

Was it due to fraudulent omission to enforce the Act? Your guess is as good as mine.
Whatever reasons there may be, there is no excuse for not complying strictly with the laws in order to contain deceitful and dishonest operations.

Legislations would be a mockery unless they serve the very purpose for which they were intended and prosecution must impose penalties commensurate with the degree of offence committed.

HBA is in full praise of the call made by YAB the Prime Minister that developers who blatantly ignore the laws’ terms and conditions of development should be prosecuted and put behind bars.

Local authorities that do not exercise their responsibilities to monitor and supervise projects in their areas of jurisdiction and to bring offenders to book should likewise suffer the same fate.

The problem of non-issuance of strata titles remains the major complaint among house buyers. For the second year running it tops the list of complaints both in terms of percentage and absolute numbers. And the trend is escalating. Yet we see no serious or concerted effort being taken by the authorities to curb this disturbing trend. In fact, we anticipate that a situation will be reached when the number becomes so great that it will be beyond control and unmanageable. At this stage it will be too late to mend.

HBA would like to suggest the following action plan.

For those errant developers who continue to ignore the law that require them to apply for strata titles, the Ministry of Land and Cooperative Development or its appropriate arm should prosecute them for such breaches.

If they continue to drag their feet, then the directors of the offending companies should be held accountable.

In cases where the developer/proprietor have been wound up or where the Ministry deemed them incapable to apply for the titles, such a requirement should then be handled by a vehicle similar to the Syarikat Perumahan Negara which handles abandoned housing projects.

It would also be logical if strata title applications are submitted simultaneously when the application for building plan approvals are made. Here we are glad to mention that the Malacca state government had taken the lead in such a practice. In such cases the strata titles could be issued together with the CFO.

The legendary excuse of lack of manpower and/or expertise in the various departments is unacceptable. This is a lame excuse and appropriate measures must be taken to remedy the situation.

2. Meeting the needs and expectations of House buyers.

In Malaysia the trend in the housing industry is selling houses “off-the-plan” .coupled with glossy and attractive sales brochures as opposed to those in other countries such as the USA, Australia and some others where houses are built first before they are sold to the intending buyers.

This current practice has resulted in a trail of havoc suffered by countless house buyers when the dream houses that they had purchased remained illusive dreams when the developers abandoned the construction. In the meanwhile they continue to rent houses to house their loved ones. Worst still, most of them would have spent all their life savings. They are further compelled to continue servicing the interests on the loans that they had taken. This is the situation brought about by the “Buying-off-the-Plan” system. HBA is of the view that the situation cannot be allowed to continue. Clearly the “Build then Sell” system should be adopted so that such kind of misery would not burden the house buyers.

The Built then Sell concept involve the shifting of the risk factors from the buyers to the developers and the financial institutions. Presently, house buyers carry a large proportion of the business risks involved. They start paying even though the houses that they have purchased are nowhere near completion. They continue paying progressive payments until such time when the houses are completed. If for whatever reason the construction of the houses are disrupted or abandoned, they are the ones who bear the brunt. House buyers should not carry the risks because they are not business proprietors like the developers and the financial institutions.

We would like to see a situation where financial institutions fund the developers to build houses. When the houses are completed, then the financial institutions finance the buyers to pay for the completed houses.

The Build then Sell concept will also put an end to a host of other lesser but nevertheless serious problems faced by house buyers. These include shoddy workmanship, non-issue of CFOs, non-issue of strata titles and the reluctance of developers to pay late delivery penalties (LAD). It will also compel developers to build quality homes commensurate with their prices and not resort to cost-cutting measures using sub-standard material and employment of cheap unskilled labour force. Presently errant developers are fully aware and promptly exploit the fact that house buyers do not have a way out without incurring heavy losses.

Some quarters have been calling the era before the revamp of the Housing Development Act a situation of “Buyers Beware or Caveat Emptor” and the situation after the revamp a situation of “Sellers Beware or Caveat Venditor”. Caveat Emptor or Caveat Venditor, BUILD THEN SELL is THE VICTOR.

3. How effective will be the Housing Tribunal?

The recently implemented revamped Housing Development Act has plugged some of the loopholes, rectified inadequacies and even some questionable and grey clauses that existed in the original Act. The procedures for control and licensing of housing developers have been made more stringent so that non-bona fide developers would be marginalised. The effectiveness of the revamped Act remains to be seen. It would only reflect its effectiveness after a period of time. However, much depends on the degree of enforcement to be carried out.

A major significance is the long awaited inception of the Home Buyer’s Tribunal where aggrieved house buyers can lodge their claims against developers in cases where the amount per “cause of action” is less than RM25,000. The Tribunal provides an affordable and speedier alternative for house buyers to seek judgment in their disputes with the developers. We are delighted to note that since its recent inception, it had promptly convened and dispensed with a number of cases.

A lingering question remains in our mind. This is with regards to the finality of the Tribunal. There appear to be some dissatisfaction among certain quarters about this ruling and they wish to make appeals to higher Court of Law. If this is allowed, then we see the demise of the Tribunal. The intention of Parliament in setting up the Tribunal is to accord downtrodden and financially spent house buyers a speedier and affordable avenue to seek redress from the big and financially strong developers. For this objective to be achieved, the ruling of the tribunal must be final otherwise we see a situation where those financially strong and arrogant developers would appeal to all rulings that are not made in their favour, not for anything other than to buy time and to frustrate complainants. It also challenges the authority of the Tribunal and belittles the Award of the Tribunal Chairman.


HBA fully understands and appreciates the vital role played by the housing industry in the nation’s social and economic development. It is precisely for this very reason that we have been critical of the weaknesses that are prevalent in the industry

We believe that the industry can only flourish in an environment of orderliness and good governance. .

On this aspect, all players in the industry have a role to play. From the highest regulatory government body right down the line to the professionals, must play their part. Regulatory bodies should exhibit neither fear nor favour. Development enterprises should have some humanitarian feelings and social obligations to serve the people and the nation. Loans should be given to developers so that they can build houses. House buyers’ loan should only come in to pay for the completed houses. Architects, engineers and all the professionals related to the building industry should be conscience driven and display true professionalism of their trade and not to succumb to their unscrupulous and greedy paymasters who are bent on amassing quick profits.

Our views are based on solid facts and genuine cases of house buyers’ woes. They deserve adequate protection under the Law and not merely sympathies.

Thank You.


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