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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


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