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Putting a stop
to activities of bogus developers
06/12/1998 NST By
Shaik Osman Majid
Buying a house was a nightmare for many in
the past. Looming large over the housing scene was the spectre that the developer
might be a conman out to exploit the long queues of housebuyers.
Many buyers discovered that the 'developers'
were no more than enterprising cheats, without land, approved plans or permits
to put up houses. Yet, they had manner of schemes to collect as much as they
could in lucrative booking fees, absconding before the law could catch up with
them.
Amendments to the Housing Developers'
(Control and Licensing) Act in the mid-1970s made the collection of booking
fees illegal. The legal resolution, however, did not extirpate the booking fees
phenomenon.
It remained very much an intrinsic part of
the housing scene, surfacing every now and resulting in financial losses to
buyers who unsuspectingly paid the fees to daylight robbers masquerading as
developers.
Booking fees is a central issue in last week's
brouhaha at Cristal Land (M) Sdn Bhd. after the discovery by buyers that the
company neither had a developer's licence nor approved plans to develop the
low-cost housing project in Jinjang Utara, Kuala Lumpur.
Many of the outraged buyers staged protests
the previous week in the front of the company's premises, demanding a refund
of the deposits, as much as RM3,5000. Cristal Land responded by issuing cheques
which bounced.
Even more outraged, some of the buyers raided
the company's office, according to reports.
While a few harangued the staff, one hijacked
a personal computer system, averring not to part with it until he received restitution
of his downpayment.
All these do not speak well of a law-abiding
society. To be fair, the buyers about 220, are embittered. For each, RM3,500
is a lot of money. So it the total, RM770,000 (though Cristal Land claims the
amount is much less), most of which was paid as early as 18 months ago. And
where do they turn for speedy resolution of their problem?
Not to the Ministry of Housing and Local Government.
It has washed its hands off the problem. On Wednesday, its Minister, Datuk Dr
Ting Chew Peh recited teh old mantra that the Developers' Act does not cover
unlicensed developers. Thus, " there is nothing that the Ministry can do".
Ting said: "It is purely a police matter."
He suggested that the matter should be investigated as a cheating case by the
police.
Even if investigation, which would be a long
drawn process, results in the culprits being charged in court, buyers would
not get compensation for the loss of their booking fees. They would left to
fend for themselves.
Cristal Land buyers are not the only unfortunate
lot. Others numbering thousands have lost millions of ringgit in booking fees
of housing units in non-existent schemes.
It is highly likely too that the unscrupulous
would continue to exploit the lacuna in the law and exact booking fees from
the hordes of homeless seeking cheap housing.
This group of homeless number hundreds of
thousands in search of low-cost housing. They would rush to pay whatever payments
or deposits required by the developer to obtain their housing units. They need
help to ensure they are not cheated.
All that the ministry has to offer are two
measures. One is a pamphlet," A guide For Housebuyers". This 24-page booklet,
which advises the public to check the credentials of developers before signing,
is at the moment available at the ministry.
Now the question is: how will this guide available
only in Damansara be helpful to housebuyers in Jinjang Utara, leave alone in
Sungai Petani, Kedah or Skudai, Johor?
To be sure, the Ministry first came out with
a simple guide to house buyers in 1975. Though thousands of copies were printed,
few were actually distributed. Most remain stacked up in a store room within
the ministry.
Complaints aired by buyers over the loss of
booking fees and other problems in buying a house such as delays in delivery,
crack walls and faulty plumbing fixtures in new units perforce the ministry
to update the 1975 guide.
It printed thousands of copies of the new
version in Bahasa Malaysia and English in May 1981. It has since transpired
that these copies were not distributed to the States and districts for the benefit
of potential house buyers.
Ting on Wednesday said the ministry would
also look into the possibility of making it compulsory for all housing developers
to issue buyers with a copy of the guide. The boot, however, is on the other
foot.
Developers on the list of the ministry
are all licensed; most are subsidiaries of listed companies. They would not
stoop to collect booking fees, knowing only too well that they would lose their
licence if they resort to such reprehensible practice.
Rather, the ministry should work out a distributory
network to channel copies to the ground level, to district officers or information
offices, to new villages and to community halls.
It should make the guide available to all
homeless who would then become aware of the potential pitfalls in buying a house.
Another measure, according to Ting, that the
ministry is contemplating is to blacklist purported developers. It might not
issued a developer's licence to these companies which have collected booking
fees when they were not licensed.
The question here is; when will these measure
come into effect? Even then, will the ministry have the will and clout to act
on errant companies?
For one, let us examine the case of Cristal
Land. It had considered that it was at fault in collecting booking fees.
Indeed it had promised to reimburse buyers
with refunds by April. In the meantime it proposes to submit plans to develop
its project to the Land and Mines Department.
Though it has not announced publicly, the
company might submit an application for a developer's licence.
It will be interesting to see how Ting and
his officials will deal with Cristal Land's application, if and when the company
submits one.
Whatever the outcome, it would offer little
consolation to the present buyers, who would only await payments of their booking
fees. They would have learnt their lesson of committing money to an unauthorised
housing project by unlicensed developer.
But what of other future buyers? What safety
net do they have? The ministry's guide book if copies percolate to district
and mukim levels, might not be sufficient help to house buyers to discern the
genuine developer from the bogus.
If all authorities, from the ministry down
to the local councils, put their heads together the conman could easily be prevented
from carrying out scams.
Local councils have development plans of all
vacant lots within their jurisdiction. They would also know of the status of
land, gazetted variously as agriculture or reserve.
Thus they should be alert to any signboard
that heralds housing projects, both real and the spurious. For local councils
are the licensing authority of signboards.
Granted, most councils do not have the necessary
manpower to constantly scout the signboards that might spring up willy nilly.
But neither they nor the ministry should abdicate responsibility to ensure house
buyers are not cheated.
The ministry perhaps should consider a publicity
campaign aired over the Government- run television channels to supplement the
information contained in the guide book to house buyers.
That initiative would go a long way to educate
the public on the precautions they must take before signing to buy houses.
The campaign should make it clear that booking
fees are illegal, that the first payment need only be made after the signing
the Sales and Purchase Agreement.
Perhaps then the activities of bogus developers
might be preempted and the bane of booking fees rooted out from the housing
scene.
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