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Knock, knock! Any good developers out there?
01/07/2004 Published in Malaysian Business - Housing & Property By the National House Buyers Association of Malaysia

The qualities of good developers is to be emulated, if you can find them.

THE housing industry has come a long way since the advent of large scale housing development in the late fifties and early sixties. The players in those times were bona fide entrepreneurs. Most probably, conscience ruled and pride in workmanship, timely delivery of quality and affordable houses were their hallmarks.

The present delivery system of `sell then build' through progressive payments is fraught with risk for the unsuspecting house buyers.

These second generation of housing developers, good or bad, are used to lucrative environment in the housing industry. This is so because the post-independence period has been a period of high population and economic growth. Hence, the demand for housing is ever increasing. In a sellers' market, the buyers are always disadvantaged. When greed is inversely proportionate to conscience among industry players, the situation can get very bad indeed.

We often hear of developers lamenting the fact that the shortage of workers (legal or illegal, skill or inexperienced), shortage of building materials, complying with new laws or regulations making it hard for them to complete their projects in time. At the same time, we also hear of projects making profits of multi-million ringgits for the developers and we do not see or hear news of housing developers retiring or quitting the business entirely. This would mean that the housing development is still a lucrative business.

Enough on the bad ones, we at HBA do keep our ears opened for the qualities of good developers to be emulated. In the first place, how do buyers judge if their developers have been good? The construction industry is a very unique field. It is one of a few professions where no formal education is required. There is is no formal award giving ceremony by buyers to tell the world their developers have been 'good' and responsible.

There are also some other things the good developers do that prove they have a passion for their profession. Here are some of the traits practised by good developers.

Attention to environment and existing neighbourhood

Good developers do not just depend on their buyers to pass around the word of their reputation. No new project is an island. There are existing neighbouring projects, trees, etc. A good developer ensures the existing neighbourhood is not disturbed by their new development. If there are complaints eg cracks, landslide, floods that the new construction is causing to the existing neighbours, they are quickly attended to. They also ensure that the existing roads are kept clean regularly from construction activities.

Amenities, facilities and infrastructure

Developers who provide adequate amenities and facilities like playgrounds, schools, markets, community halls and even police booths are not only fulfilling the obligations imposed by the local council but also their social responsibilities to society. These developers are commendable as good corporate citizens. It enhances their image too. There too are developers who invest and build infrastructures first prior to selling their houses.

Takes pride in quality and timely rectification

Whether low cost or high cost houses, chasing the developer to rectify shocking defects, bad workmanship is a nightmare to buyers who lose out while waiting for repair works. Good developers do their own quality check before handing over their products. Caring developers do practise the following before handing over their products.

• Adopt quality check at all stages of construction, test and commissioned utility supplies;

• Clear and clean individual units and construction site from construction debris;

• Ensuring the Certificate of Fitness for Occupation is timely with the handover;

• Retain a team of competent workers to do rectification promptly if there are complaints on defects.

Some developers even extend the mandatory defects liability period of 18 months. We have also heard of developers providing alternative lodgings for their buyers while waiting for defects to be corrected.

Timely delivery

Time of the essence of the contract of sale and purchase. Houses should be delivered within the time stipulated in the sale and purchase agreement ie within 24 months for 'land and building' and 36 months for 'building intended for subdivision'. If for whatever reason, there are delays, compensation should be paid immediately to buyers without second thoughts or finding devious ways to 'short change' the buyers.

Good developers keep their buyers informed of delays and tell them of the next expected delivery date. Some buyers even told us of the extras they have received at delivery time, which surely endears them to the developers. These are some of the 'welcome packs' that they have received: Useful gifts like key box; warranties from paint companies, auto-gates, pest control, electrical appliances; certificates of treatment for termites / pest control; a copy of the Certificate of Fitness for Occupation issued by the Local Council and certified as a copy of the original.

Interest charged

One clause in the sales contract states that the buyers is responsible for late payment interest. It is a common complaint by buyers that their developers would charge interest for late payment even though it is the fault of the end-financier or their lawyers doing the legal documentation. Good developers assist in ensuring that the documentations are in order and the buyer is not burdened with any late payment interest.

Joint management (for subdivision)

Good developers assist their buyers to form committees and be prepared for the formation of the management corporation. These developers realise that the projects they have developed will eventually pass to the owners to maintain and manage.

Encouraging community living

Developers who encourage forming of resident/owners association are a welcome lot. Some even go to the extend of contributing monies for the formulation of buyers representative group for a meaningful channel to voice grievances. Some even provide meeting facilities and allocate a multipurpose room for the elected representative group.

Good communication

The line of communication should always be open between buyers and their developers. It is obvious to do so for the obvious reasons:

• Keeping buyers informed of the ongoing projects and their products;

• Developers not to appear having shun away from their responsibility;

• Treating the buyers with respect as buyers can serve as their marketing tool. Show respect and you will gain respect;

• Transparency and accountability on monies collected;

• Providing regular accounting reports and budgets;

• Voicing of any grievances rather than through the media, which will bring adverse effect to the detriment of both parties.

Build first then sell

There is no step that can be more pronounced than for housing developers to adopt the 'built first then sell' so that potential buyers can see for themselves the finished product before buying. We believe that in this way, most of the present day ailments afflicting the housing industry can be avoided and the housing industry will be a lot more orderly.

There are good developers whose names are synonymous with quality and trust. They are able to win over buyer's confidence. Today, they have created their own brand names. No wonder some developers do not advertise, yet all their units are sold-out even before the official launch.