The buck stops here

15/04/2006 Published in NST-PROP A Buyer Watch Article by National House Buyers Association

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Going by the book - the Housing Development (Control & Licensing) Act - it is the Ministry of Housing and Local Government that is wholly responsible for protecting house buyers.

This fact can be found in Sections 7(f), 10,11 and 12 of the legislation, which reads:

Section 7 (f) - Duties of a licensed housing developer

Not later than the 21st day of January and 21st day of July of each year, (a developer must) send to the Controller (of Housing) a statement in such form and containing such information as the Controller may from time to time determine, on the progress of the housing development the developer is engaged in.

Section 10 - Investigation

(1) Either on his own volition or upon being directed by the Minister (of Housing), the Controller or an Inspector may from time to time, under conditions of secrecy, investigate the commission of any offence under this Act or investigate into the affairs of or into the accounting or other records of any housing developer.

(2) The Minister may also direct the Controller or an Inspector to make an inspection.

(a) If he has reason to believe that the housing developer in question is carrying on his business in a manner detrimental to purchasers; or has assets insufficient to meet his liabilities; or is contravening any of the provisions of this Act; or

(b) If an application for such investigation is made to him; and every such application shall be supported by not less than five purchasers and accompanied with such evidence and such security as the Minister may require.

Section 11 - Powers of the Minister to give directions for the purpose of safeguarding the interests of purchasers.

(1) Where on his own volition a housing developer informs the Controller of where ... the Controller is of the opinion that the licensed housing developer becomes unable to meet his obligation to his purchasers or is about to suspend his building operations or is carrying out his business in a manner detrimental to the interest of his purchasers, the Minister may, without prejudice to the generality of the powers of the Minister, give directions ... for the purpose of safe-guarding the interests of the purchasers.

In giving his direction or decision, the Minister may specify that any cost and expense reasonably incurred by such persons as may be specified by the Minister in carrying out such direction ... shall be paid from the Housing Development Account of the housing development or from the moneys due to the Account.

Section 12 - Powers of the Minister to give general directions.

The Minister may give a licensed housing developer such directions as he considers fit and proper for the purpose of ensuring compliance with this Act.

However, these things are only good on paper! We wholeheartedly concur with NST-Property columnist and law expert Salleh Buang, who in a recent article titled "Handling rogue developers", noted that "perhaps it's time to use the sledgehammer" against them.

He said, "in terms of ringgit and sen, these 75,356 house buyers left in the lurch cost RM7 billion... (that's) money down the toilet.

"To let this sort of thing happen is default".

It's default on the part of the monitor, default on the part of the supervisor; default on the part of the enforcer and default by the Minister of Housing and his ministry!

Consider what Prime Minister Datuk Seri Abdullah Ahmad Badawi said on Nov 22 last year: "If the project was monitored on a regular basis from the start, any sign of it being abandoned could have been detected, and it salvaged ...".

Wasn't that the purpose of Form 7(f)? That all housing developers must submit their progress reports biannually to the ministry? Is at all the ministry competent to detect and diagnose the symptoms of a "sick" project when the developer lodges this form? Does it do a site check to audit the accuracy of such reports?

Footnote: The Parliament of Malaysia was told on April 3 that 2,326 housing projects abandoned during the course of the Eighth Malaysia Plan would be revived under the Ninth Malaysia Plan. According to the Minister in the Prime Minister's Department, Datuk Seri Mohamed Nazri Abdul Aziz, some of the projects could not take off the ground because of problems of "acquiring land from State Governments".