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02/05/1999 NSUNT By Shaik Osman Majid

BUYING a house is a headache for many. They would have to search out affordable units, run around to arrange loans and then commute regularly to the project sites to monitor the progress of construction.

When the houses are completed, some buyers of properties in specific projects face an even greater headache, a heartache to be sure. They cannot move in for the simple reason that the units have not been issued with the certificate of fitness that attest the dwellings to be livable.

Over the years, this problematic phenomenon has surfaced and has been reported with clockwork regularity. The latest group to join this disgruntled list is a group of buyers of phase two of the Le Chateau condominium in Lorong Syed Putra Kiri, Kuala Lumpur.

It is reported that they have been waiting four years to move into their units that are still not issued with the CFs.

Why? The Ministry of Housing and Local Government which had investigated into the problem has some answers. Its spokesman is reported to have told the Malay Mail on Tuesday that the Minister, Datuk Dr Ting Chew Peh sent a letter to the developer warning the company to resolve certain problems or else face a fine.

The problems include failure to change the land use, to pay the land premium and to apply for strata titles. The developer also had not settled development charges, according to the Ministry's spokesman. Moreover, the company had not renewed its developer's licence which expired on Aug 23, 1996.

Despite not meeting the requirements of the laws and conforming to regulations the developer had been benignly allowed to advertise, sell, build and hand over unlivable units. And the buyers complained four years ago and nothing was done until the despatch of the Ministry's letter 10 days ago. Which raises the question who is the more reprehensible in this and all other problems of non-issue of certificate of fitness.

An analysis of the various procedures a developer has to go through before he builds paints an interesting picture of legal and regulatory requirements the company has to comply with as well as the responsibilities of the various approving authorities.

Developers have land banks or buy land. These days much of the land earmarked for residential, commercial, industrial or mixed development was originally gazetted for agricultural use. So before they can be developed into housing or other building projects the land has to be converted.

Simply put, the use of the land has to be changed. The operative word is conversion of land title.

However before the developer can submit application for conversion he must attach plans on the proposed development. To enable the company to map out the scheme, a town and country planner is summoned. He would recommend the best mix of buildings, residential, commercial and industrial. This applies to large projects.

For smaller projects of only residential houses, the developer must meet the low cost quota. Only those developers who have very small plots are absolved from this requirement.

The lay-out plan will show the type of residential units the developer proposes to build. This plan must also conform to the large master plans of each local council where the development project is sited. Land must be reserved for roads, open space, playgrounds, schools, suraus, for Tenaga sub-stations and for sewage treatment ponds. This overall plan is sometimes called the development plan.

These are the documents that the developer must submit to the land office in the district. The officers will then check with the town planning department of the local council whether the development plan conforms with the authority's master plan. If yes, approval for the conversion of the land is given by the registrar of land. If no, changes would be suggested.

But before approval for conversion is given, the applicant must pay the difference in premium for the use of land. For agricultural land, the amount is minimal. The percentage varies from location to location. But the norm is very much less than one per cent of the value of the land.

For residential use, however, the premium would be higher, very much higher. Again the percentage premium levied on the land varies not only according to locations but also from time to time, depending of the market forces of demand and supply.

We could, nevertheless, use one yardstick that does not really distort the reality of prices and premiums. The premiums would be twenty per cent of the value of the land for commercial use; 15 per cent for industrial buildings; and, 10 per cent for residential development. Whatever the numbers, the premium must be paid upon application before conversion is approved and the respective title for use of the land is granted.

That the developer of Le Chateau condominium was able to obtain land development approval without conversion of the land and without paying the new premium fee remains a mystery. A senior manager with a large developer, overseeing various projects in the fringes of the capital city has a plausible explanation. According to him, time was when Kuala Lumpur's City Hall permitted development even before conversion. The rationale was to allow the developer to raise the money which could run up to many millions of ringgit through the sale of the units and then pay the fees.

That regulatory latitude was tightened in the mid-1980s. Perhaps permission was given for the entire Le Chateau project. This should explain why the second phase of the project was started in 1991 without the agricultural land converted to residential land.

All these are, to be sure, conjecture. The facts have yet to be fretted out. But one fact remains: that the developer was stepping up a loose ladder to build the condominium project. The company knew or should have known that at the end he would have to apply for a certificate of fitness for his units. And without a proper land title the CFs would not be issued.

Be that as it may, let us examine the subsequent procedures a developer must pursue to obtain various permits even before he can advertise, sell and build.

After obtaining conversion of land the developer must turn to the Ministry of Housing and Local Government for two permits. One, a developer's licence, valid in each instance, for two years in the case of single and double storey projects and of three years' tenure for high rise residential buildings.

Surely, the Ministry does not perfunctorily stamp approvals on all and any applications for a developer's licence. Clearly they have a beholden duty to scrutinise whether the company has procured the technical personnel and has marshalled the financial resources not only to undertake the housing project but also see it through completion.

More importantly, it vets land titles to ensure the land is in the name of the developer even though it might be temporarily pledged to a bank to raise start up funds. So the question arises: how did it grant the company that proposed to build Le Chateau condominium a developer's licence when all the company presented was a title to an agricultural land? The Ministry even gave the developer a sales and advertising permit.

Clearly then the Ministry has, perhaps, due to oversight, contributed the current problems faced by the buyers of the Le Chateau condominiums.

Their heartaches might have been averted by more vigilant vetting by the Ministry.
Failure to obtain land conversion is only one reason for the non-issue of the CF. Developer's failure to meet other regulations of numerous agencies involved in the construction and approval of houses is the main reason of thousands of other buyers not being able to move into completed houses.

When a development plan is submitted to the land office, in the first stage of land conversion, as many as eight agencies are consulted to ensure their requirements are worked into the scheme. These are the Telekom, TNB, JKR, water authority, Bomba, Indah Water Consortium, Health Department, the local council and their engineering and landscaping departments.

Responsible developers incorporate the demands of these agencies in their plans. Their contractors execute them. The projects are completed. Connections of water and electricity are in place. The keys are handed over to eager buyers, anxious to move in.

However in the case of many, indeed hundreds every year, dreams become nightmares simply because the CFs have not be issued by the local authority which would cite a slew of reasons of non-compliance.

In many cases, the blame can be placed at the developers' door. They cut corners in meeting various specifications like the provision of drains, open space, et cetera, et cetera.

In other instances, developers should not be blamed as the authorities change the rules while works are in progress. They are required to make provisions for gas pipes, enlarge drains, create space for schools and more open spaces.

All these skewer developers' plans, forcing them to rechart their development schemes and cause delay in the completion of the entire project. This leads to the delay in obtaining the CF. Are the developers entirely to blame?

And now moves are afoot to engender as law the requirement that developers be solely responsible to obtain the CFs. They could well accept that responsibility if only the authorities clearly map out in their master plans all the facilities they desire in place for residential estates.

This requires a lot of thought, visionary thought not only by the local authorities but also by the State Governments who ultimately are the master planners of development in the areas of their governance.