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Housing heartaches
29/10/2005 NST-PROP By Salleh Buang

In May 2004, Prime Minister Datuk Seri Abdullah Ahmad Badawi was quoted by the local media as saying, "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?"

That is not, contrary to what many may think, a rhetorical question from Abdullah. It was a serious conundrum that demands careful thought and immediate follow-up action.

Unfortunately, more than 17 months later, the Housing and Local Government Ministry has yet to come up with an answer. Feet dragging its practice for decades have apparently not abated. Meanwhile, Joe Public continues to suffer.

And if you are a frequent traveler through logger’s communities in cyberspace, you will notice that Joe Public now has very little faith left in the Housing Ministry. Yes, over the years, the credibility gap has no diminished.


Rather, it has widened considerably.

Citing just a few news items published earlier in the month should suffice to high- light the suffering of
Joe Public.

One distraught house purchaser, Azmi Atan of Balakong in Selangor, said in his letter (New Straits Times. Oct 7,2005) that the apartment he purchased from "a reputable housing developer" in February 2001 still hasn't been completed,

Meanwhile, he has to start paying his bankRM400 a month, not as installment for the loan, but for the
interest only.

Since Azmi has no house to move into yet, guess he is still renting somewhere, and has to continue paying rent until he gets his apartment.

Azmi also told of his colleague an unnamed lady, who also bought an apartment there her was a different story. She received her keys from the developer, but could not occupy the apartment because it required a lot of repair work. The developer promised to rectify the defects, but has yet to carry them out.

Azmi said that the handing over of keys to a house with defects, especially one requiring a lot of repair work, is a dirty ploy of the developer. The strategy seems to be "better hand over the keys to the premises", despite the defects, rather than be sued by purchasers for late completion, He therefore asks if there is any way of addressing this issue".

The Housing Ministry should answer this. After all, t it is there to serve Joe Public, Haven't the courts repeatedly said that the objective of s the Housing Development Act is to protect purchasers?

Echoing our Prime d Minister's (now well known) sentiment, Azmi said, believe houses should only be sold after they are completed".

Another member of the public, who simply called himself SWW, of Ipoh, said in a recent letter to NST
that his wife purchased an apartment from the subsidiary of a public-listed company five years ago. Until today, he said, they are still waiting for the keys. They have made numerous visits to the developer, but I each time were given the run-around.

When they went to the worksite, they saw "just blocks of uncompleted units". When they reported the matter to the enforcement unit of the Housing Ministry, they realized that they were not the only victims of what now is clearly another housing scam. SWWs estimate is that at least 1,000 house buyers are affected by the project.

These two cases are obviously just a tiny drop in the ocean of delayed and bungled housing schemes by developers that either do not have the necessary financial resources or the management skills to complete their projects, not only on time but to the satisfaction of their purchasers.

The question is, why should the law continue to protect such ill-equipped (and possibly dishonest) developers and ignore the plight of their innocent and helpless victims? Is the developers' lobby in this country really so strong that even the clear exhortations of the Prime Minister cannot make an impact and cause a shift in the law?

I recently looked up a paper written in December 1999 by a Housing Ministry bureaucrat, titled "Housing in the new millennium: Malaysian Perspective". In the opening paragraph, it says Vision 2020 calls for the formation of a Malaysian society that enjoys a high quality of life". But what quality of life is there for Azmi of Balakong and SWW of Ipoh?

The paper went on to say that the objective of our National Housing Policy is "to ensure that all Malaysians, particularly those in the low income groups, haye access to adequate and affordable shelter and related facilities". But what is "access"?

To my mind, "access" must mean not just the chance of buying a house but also of actually getting
one the dream of a roof over one's head is certainly not the same as actually having one, completed
and in perfectly good and habitable condition.

The National House Buyers Association (HBA), in recommending the sell-then-build system of housing delivery be scrapped in favor of a "deferred payment scheme" or the 10:90 concept that is practiced in Australia, pointed out several inequities in the existing legal system:

  • Vacant possession have been given although Certificates of Fitness for Occupation (CFs) have not been applied for;

  • Vacant possession have been given although construction work, including amenities,
    have not been completed;

  • Long delay in obtaining CFs after the delivery of vacant possession;

  • Buyers have to endure the agony of chasing after developers to make good on their
    breaches, rectify defects and so on long after the delivery of vacant possession; and

  • Buyers have to endure all kinds of problems, such as water seepage/leakage, broken pipes, cracks and houses not built according to specifications.

The HBA believes the pre- sell system allows developers "to take risks with purchasers' money". In other sectors, business people take risks with their own money, but apparently not the housing industry.

The HBA also believes that many developers (including public-listed ones) use special purpose companies to limit their financial risks, but ironically, house buyers have no such protection. As a result, for many people who thought they were buying properties, what they actually found themselves with are debts and a lot of heartache.

In the meantime, the housing developers' lobby will continue to make its voice heard. As it has done in the past, I believe it will continue to do so in the future. It will marshal (and Some people would say,
convincingly,) its reasons why the HBA proposal or for that matter, any variant of the build- then-sell system cannot work. It will continue to maintain that the present system has worked well, and should not be changed.

I hope, for the sake of Joe Public who has lost all his money, and is now facing a huge debt, but with no roof over his head to call his own, this debate will come to an end. If the Housing Ministry cannot deliver, perhaps the Prime Minister should step in and take matters in his own hand.

Salleh Buang is senior advisor of a company penalizing in competitive intelligence. He is also active in training and public speaking and can be reached at


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