RM25,000 is below market rate: HBA
20/09/2000 MM By Azlan Ramli

Don't be ridiculous. Try to being reasonable and sincere.

The House Buyers Association, Kuala Lumpur and Selangor, (HBA) hopes the Government will have those two qualities when establishing a tribunal to arbitrate disputes between the buyers and developers.

It expressed its concern over a recent report of such a plan by the Housing Ministry.

While the tribunal is welcomed, the association does not feel good about a condition which qualifies a claim to be handled by it.

A local daily reported that Minister Datuk Ong Ka Ting said the tribunal will handle cases involving houses costing less than RM25,000.

The tribunal may be established under amendments to the Housing Developers' Act.

"This is ridiculous!" said HBA chairman Datuk Zainuddin Bachik. "Even the Perodua Kancil will cost more than that!

"Who buys a house at that price anymore, especially in the Klang Valley and other cities? A low-cost in the Klang Valley is no less than RM42,000."

He said they hope the Ministry will set the maximum mark a little higher to make it a fair amount.

Precautionary measures to protect house buyers

The authorities, developers, public and those involved in the housing industry should take note and consider some ideas and suggestions by the House Buyers Asssociation, Kuala Lumpur and Selangor.

HBA secretary Chang Kim Loong said they are:

• The Government should make development reports public. This is to make it easier for the public to observe developments of projects to build their houses so that they can take precautionary steps when there are delays and problems, among others.

• Developers should list down buyers' particulars like names, addresses and contact numbers so that the later can form groups in case of problems like workmanship and damages.

• The Government should enforce the "colour code the developer" method and make it public so that potential buyers will have a better idea who they are dealing with.

• Blacklist developers with bad records and make it public. Builders with failed/abandoned projects should be disqualified from future projects and licences. Similarly, their companies and subsidiaries should be prohibited from undertaking house projects.

• Jail bad developers instead of fines. The cases should be published.

• Stop unhealthy sales gimmicks among developers who make claims such as "In five years, your RM200,00 house will be worth RM800,000" and so on.

• Put to practice the Build & Sell concept. Starting with Government joint-venture projects (after amending some ancient rulings), among others, the minimum paid-up capital for a company to obtain a developer's licence.

• Currently, under the Housing Developers (Control & Licensing) Act 1966, an application for a licence will be granted if a company has a paid up capital of "not less than RM250,000".
  This licence is valid for three years for landed residential development and five years for stratified housing.

Chang said this Act must be amended. "RM25,000 was a very huge amount way back in 1966. The paid-up capital now should be at least 30 per cent of the total value of the project.

"This is to avoid developers from using the money buyers pay them to finance their projects along the way because they don't have enough money themselves.