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Handling rogue developers
25/03/2006
NST-PROP
By Salleh Buang
EARLIER on in this column, I said that high on my wish list for 2006 is an
end to abandoned housing. But going by news reports, not just in the dailies
but also over prime time TV news since January this year, stories of such
banes still continue to haunt us.
This has led to some worry that the prospects for the Year of the Dog do not
seem to be too bright for Malaysian house buyers.
Frankly, I have no confidence that the Housing and Local Government Ministry
will ever be strong enough to push through a mandatory Build-Then-Sell (BTS)
system of housing delivery in Malaysia - not in the next few years at least.
The latest I heard from informed sources when I was in Kuala Lumpur recently
was that, at best, a modified form of the BTS would be introduced, and even
then, as an option alongside the current Sell-Then-Build (STB) model.
Yes, it looks like the status quo will remain. Rogue developers will
continue to escape the clutches of the law. Victimised house buyers will
have nowhere to turn. Although the courts have, time and again, said the
stated purpose of the law is to protect purchasers, the reality is that the
law is toothless against rogue developers.
A reader e-mailed me this note not too long ago: Every time consumers have a
problem with rising prices of goods such as vegetables or fish, we see the
relevant minister do his rounds in the markets. Whenever a medical or health
"incident" breaks out in a public place, the relevant minister would be seen
visiting the site or the victims.
And every time an educational flap occurs, the relevant minister will
immediately respond.
However, he asked, "Have you ever seen the Housing Minister (or his deputy)
visit the site of an abandoned housing project, or talk to the victims?" I
replied, "Sadly, no."
In law, default can either be through overt action (of a wrongful nature) or
omission to act (to right a wrong).
To me, not doing anything to resolve a problem is default. Allowing the
problem of abandoned housing to continue is default. Leaving the victims to
fend for themselves is default.
Merely providing a clause in the statute stating victims can take rogue
developers to court is not good enough. It is only good on paper. The remedy
is but an illusion.
Even if the victims have the determination - and that extra money to pay for
lawyers to file their cases - they face a long wait and uncertain future.
They cannot bet on the verdict, and the worst scenario is that in the
meantime, the rogue developers will have disappeared.
We have seen the statistics before. In the year 2004 alone, 227 housing
projects were abandoned, involving 75,356 houses. These abandoned houses can
be seen in every State - from Perlis in the north (where three projects are
abandoned) to Johor in the south (19 projects).
Selangor tops the list with the largest number of rogue developers, who
abandoned 55 projects in all, followed by Penang (24 projects), Negeri
Sembilan (22), Pahang (21) and Perak and Johor (19 each).
Yes, we certainly are an "equal opportunity" nation when it comes to giving
birth to rogue developers. In terms of ringgit and sen, these 75,356 houses
cost the victims more than RM7 billion. It's money down the toilet. And to
let this sort of thing happen is default.
Under the law, you go to jail if you steal another person's pair of
slippers. You go to jail if you pick up a pair of socks at a supermarket and
"forget" to pay. You go to jail if, as an accounts clerk, you use office
money for your personal expenses. You go to jail if, as a police constable,
you accept RM20 for not issuing a "ticket" to a speeding motorist.
In the first two cases, they simply call it "theft". In the third case, they
call it "breach of trust" and in the fourth instance, they call it "bribery
and corruption".
However, rogue developers who run away with millions, or even billions of
ringgit of their victims' money, do not go to jail. They remain free to roam
the land and find new victims. They can still use nominees, set up new
offices in other areas and from behind the scene, continue to fleece
unsuspecting house buyers.
So, isn't the time right to throw away the kid gloves and use a sledgehammer
instead against rogue housing developers?
My question is prompted by a news report published in December last year,
about victims of an abandoned housing project in Bukit Mertajam, in mainland
Penang, staging a protest at the project site. The project commenced in 1997
but has since been abandoned.
The objective of the victims was to draw public attention to their plight -
hopefully forcing the relevant authorities to do something to help them
solve their problem.
However, the response they received was definitely the furthest thing from
their mind. They were threatened a RM50 million lawsuit for slander by the
developer. Many of these victims are teachers.
As my late father used to say, drastic situations require drastic measures.
You cannot whip an elephant with a feather duster.
It's time for us to take another look at the law.
* Salleh Buang is senior advisor of a company specialising in competitive
intelligence. He is also active in training and public speaking and can be
reached at sallehbuang@hotmail.com
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