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Between hype and hope
17/06/08 NST Salleh Buang

When a colleague told me recently that changes to the National Housing Policy will soon see the light of day, purportedly to "protect buyer’s rights", I must say that my initial response was to ask, "What policy? I don’t know that we ever had one!"

If ever there is such a thing, that important document should almost certainly be available in the relevant ministry’s website. There is none. I have been looking out for it over the last decade and I have been asking those who know more about these things than I do. Nada.

Of course there are bits and pieces of such a policy offered to the public in the past – but they were mere skeletons: Largely disjointed bare bones, without the flesh and meat to make the whole package a credible housing policy.

By comparison, if you are seeking information on other sectoral policies such as the National Environmental Policy, or a National Urbanisation Policy, you can easily find it in cyberspace.

Be that as it may, if there is indeed, at the present moment, a public document titled "The National Housing Policy", what are the changes that the Ministry of Housing and Local Government wants to make?

According to its Deputy Minister Datuk Hamzah Zainudin, the changes would focus on three areas: Building licence approvals; the standard sale and purchase agreements (SPAs); and progress reports which developers have to submit to the government (periodically to the Controller of Housing).

As these three matters are now covered by the Housing Development (Control & Housing) Act 1966, the proposed changes mentioned by the deputy minister will actually involve changes to law.

And as he had said, these proposed changes would be "subject to the perusal of various housing development agencies, associations and industry players".

My instinct tells me we will not see these changes by the end of this year. Maybe end- 2009, if we are lucky.

Think back how long it took the proposed Build-Then-Sell (BTS) housing delivery system to become a reality. Yet when it did become law, it was a very diluted version. And to make it worse (as announced by Deputy Prime Minister Datuk Seri Najib Razak), it would run concurrently with the conventional Sell-Then-Build (STB) system.

If that is not bad enough, the BTS system will only be for a "trial period" of two years.

The deputy housing and local government minister added that the proposed revamp would "ensure" two things: One, purchasers’ rights would be protected; and two, projects would not be abandoned midway due to lack of funds.

To my mind, the best way to protect housebuyers is to implement the full BTS system – or failing that, the 10:90 variant might be accepted as an alternative. However, according to the House Buyers Association, even the 10:90 variant will not guarantee that there will be no abandoned housing projects. Even so, it would be a good start.

I have for the last ten years suggested that we implement a homeowner’s protection insurance scheme. Under that scheme, no housing developer can undertake a housing project under the STB system unless it has obtained an insurance cover to protect the unlikely event its project is abandoned midway.

Should that unpleasant event occur, the proceeds of the insurance policy will go towards the cost of completing the abandoned project.

While various quarters have came out in support of such a proposal, as we had expected, it was met with a deafening silence from ministry officials.

Yet another method to protect housebuyers is to scrap the law relating to the liquidated ascertained damages or LAD.

Under the existing law, a purchaser can only claim LandMatters LAD calculated at 10 per cent of the purchase price of the house in the event of a delay in completion.

This law has caused enormous hardship to poor purchasers over the years as the provision is in fact a denial of the rights of innocent parties, which the law of the land had long provided – under section 74 of the Contracts Act, 1950.

Despite the avowed aim of the housing law to protect housebuyers, many of the provisions of the existing law are heavily in favour of housing developers.

If you ask me how all this come to pass, my answer is quite simple: We do not have a clear cut national housing policy that ensures good governance of the housing industry and fully safeguards the interest of housebuyers.

We must accept the hard truth that "law" is shaped by "policy". When the policy is non-existent or in a mess, what else can you expect of the law?


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