More laws doesn't mean less abandoned projects
27/05/2006 Published in NST-PROP A Buyer Watch Article by National House Buyers Association
 

Related Article: Pushing for change

If you look at the number of abandoned projects that littered the country last year, you'll see that it's on the rise again. Just imagine, within a year, the cancer has grown by 34 to 261!

In our article, "Are the authorities blind to victims of abandoned projects?" (NST-Property, April 15, 2006), we showed the two different sets of data provided by the Housing Ministry: That for the year ending 2002 and for the year ending 2004.

In 2002, the figure was 544, in 2004 it was 227. It is miraculous that over just two years, 31 7 abandoned projects could have been revived!

The increase in the number of abandoned projects since the housing law was amended on Dec 1, 2002 is reflective of its inadequacy. The ministry also said the increase of 34 projects between 2004 and 2005 involved 13,054 units and 7,873 buyers.

Something is terribly wrong here. Wasn't the 2002 law amended to prevent further instances of abandonment?

The bottom line is that despite numerous amendments, supposedly to protect house buyers, project abandonment continues, causing havoc to the lives of unwary buyers. We are perplexed that the ministry is suggesting even more amendments to the Act, supposedly to "further protect" house buyers!

What is worse is that abandoned housing is going to cost all Malaysians a whopping RM1 billion in order to be revived.

Why should taxpayers shoulder the burden of defaulting developers?

Compared to inbuilt houses, completed units are more attractive to buyers and financiers because of their intrinsic value. Furthermore, buyers are prepared to pay more for completed houses, rather than face the risk of buying into an abandoned project

And rightly so, Andrew Wong, editor of NST-Property, recently wrote: "Nobody should have to go through the trials and tribulations that victims of abandoned housing projects are facing. The embarrassment of becoming the subject of a con; the stress of having to struggle out of their dilemma; the financial torment of continuing to service a loan for a property that might not even exist as well as pay rent for the roof over their heads. And these are just the tip of the iceberg."

Prime Minister Datuk Seri Abdullah Ahmad Badawi has also emphasized: "I think it is not right to pay money first before you get your house. If they (developers) don't get to sell all their houses, the money won't be enough for them to build. What will happen to those who have paid up?"

If the Government holds true to its rhetoric of Malaysia being a caring society, this unjustified situation of paying for an unfinished product currently faced by house buyers should be removed. The people deserve a better system of protection for their hardearned money.

Let's take a bold and courageous step to reform the whole housing delivery system by adopting the 10:90 concept of Build-Then-Sell. This is the sensible path to take to ensure Malaysians do not suffer the woes of abandoned houses and rogue developers.