Housing account working well

Housing account 'working well'
29/09/1998 The Star By Foong Pek Yee

Kuala Lumpur: The statutory Housing Development Account requirement set up in 1991 has prevented developers from abandoning their projects despite the present economic slowdown.

Housing and Local Government Minister Datuk Dr Ting Chew Peh said the account had ensured that developers could not abuse the part-payments made by buyers.

Dr Ting said he was happy the account worked because during the last economic recession in the 1980s, a total of 430 housing projects were abandoned.

Since there was no control then on buyers' money, developers had used the sum to speculate in the stock market.

When the market crashed, the developers disappeared and abandoned the projects, he said, adding that the Government had to spend RM600mil to revive most of the projects.

Dr Ting said all payments by buyers must be deposited into a housing development account set up in trust.

"Developers can only withdraw the money in stages based on the level of construction and certification by their architects and engineers.

"Banks must be satisfied with the certification before releasing the money," he said in an interview here yesterday.

Dr Ting said a developer could be fined up to RM100,000, jailed a maximum of three years, or both, for offences under the account.

He said the ministry conducted random checks on developers to ensure they complied with the account requirement.

Engineers and architects could also be held liable if they made false certifications to enable developers to withdraw the money.

Housing Developers Association Malaysia (HDAM) president Eddy Chen agreed that the account was effective.