15/02/2003 Published in NST-PROP A Buyer Watch Article by National House Buyers Association

Stricter enforcement and custodial sentences against errant developers will help clean up the housing industry.

The recent rape of green hills in Cameron Highlands prompted many leaders, including no less than Prime Minister Datuk Seri Dr Mahathir, to make a call for the perpetrators of such acts to be jailed.

" I don't know what laws there are, but if there is a law that can put them in jail, only then will it be effective, otherwise the developers would not bother. They would just pay the fines," said Dr Mahathir, who ticked off greedy developers for leveling hills for profit without any thoughts for the environment.

Obviously, and enforcement and punitive measures play a large part in eradicating irresponsible land clearing and development activities. However, we will not delve too much on the enforcement of all the various Acts that govern development. What we would like to address here is that the enforcement of the recently implemented amended Housing Development (Control & Licensing) Act, 2002, which is relevant to our discussion.

Punitive measures

The Ministry of Housing & Local Government had, prior to the implementation of the new Act, moaned about being a toothless tiger, claiming that the old Act did not give its officers enough clout to deal with errant developers. The revamped Act, however, has not only enhanced the Ministry's powers, it has also different penalties against wayward developers, including jail sentences.

Of particular interest are the following Sections:-

• S5 (1) and (2): Pertaining to housing development without a valid licence as well as failure to comply with any of the conditions imposed on the licence.

• S7: Sets out the full range statutory duties of a housing developer.

• S7A: The opening and maintenance of a housing development account.

• S8: Requirements for obtaining the Controller's consent for entering into any sort of arrangement.

• S10 (3): Requirements for furnishing information and explanations to the Controller.

• S11(1) and (3): Compliance with specific directions from the Minister.

• S12: Compliance with general directions from the Minister.

• S15 (1) and (2): Prohibition on any person who has been adjudicated a bankrupt of being convicted of a crime involving dishonesty or fraud, from holding office as a director, manager or a secretary of a licensed housing developer.

These  offences carry jail sentences. In addition, there is a general penalty provided in S21 that states that any housing developer found guilty of an offence under the Act, "for which no penalty is expressly provided" is liable to a prison term not exceeding three years or a fine not exceeding RM50,000, or both.

The amended Act also gives the Ministry of Housing " power of entry, search  and seizure", which empowers enforcement agencies to enter the premises of errant developers to check on their operations to build evidence against the developer.

The Law allows them to search and examine and detain people in the course of their investigation to facilitate prosecution. Those who obstruct, hinder or delay the exercising of the laws will be liable for criminal prosecution. In the process, bogus developers with questionable intentions can be promptly dealt with before they get the chance to default on unsuspecting house buyers.

Protection for consumers

The amendments have given the Housing Ministry a new set of dentures, but however well drafted they may be, laws and regulations in themselves are impotent, unless they are efficiently administered and enforced. Given this, will the amendments to the HDA ensure protection of house buyers rights?

There are mixed feeling from the public. Many are waiting to see if the Ministry will strictly enforced the Act; if it will take action against errant developers who continue to default on sale and purchase agreements; or if it will prevent developers who have abandoned projects from starting new ones.

There are countless errant developers  who have caused financial loss and heartaches to thousands of unwary house buyers. Yet the number of such developers that have been prosecuted can be counted on the fingers of one hand. And of those that were prosecuted, we have not heard of any being jailed. Indeed, even the fines that were dished out were a pittance compared to the losses of the unsuspecting victims. Isn't that scenario similar to what Dr Mahathir mentioned?

Prosecution the key

During our several dialogues with the Housing Ministry, we have often brought up the subject of whether any errant developer has been punished with a jail sentence.

The usual answer is that the imposition of jail sentence is the prerogative of the presiding judge who often merely metes out a fine rather than a jail sentence in accordance with the developers offences.

The Ministry's enforcement officials, should therefore not hesitate to charge developers under the most serious provisions rather than petty ones that carry light penalties.

Concurrent with our PM's call for jail sentences for green rapist, we appeal for custodial sentences on serious offenders in the housing industry. The Malaysian house buying public long enough. The National House Buyers Association hopes that the Minister in the PM's Department looking into our laws will look into the issue custodial punishment for offenders of the HDA. This will send shivers down the spine would-be offenders and signal to them that the law will tolerate no further nonsense.

The Bar Council maintains an "Info line" to keep members of the Bar abreast of the happenings of the legal fraternity, and Lembaga Arkitek has it's "Warta" for similar purposes. We see no reason why the Ministry of Housing & Local Government should not have a similar vehicle to make known the identities of wayward developers that have been prosecuted. This will reflect transparency in the duties with which they have been entrusted with the law.