Group: Do more to protect
housebuyers
The Star 06/10/2001 By CLARENCE CHUA
PETALING JAYA: The proposal by the Housing and Local Government Ministry
to collect a RM200,000 deposit for companies applying for a developers’
licences is just “a drop of water in a teacup,” according to the House
Buyers Association (HBA).
HBA secretary-general Chang Kim Loong said more should be done to give
housebuyers greater protection under the proposed amendments to the
Housing Developers Act.
“We do not understand the rationale for such a minimal increase when the
cost of living has increased twenty-fold since the inception of the Act
35 years ago.
“HBA’s stand is that to enable developers to be serious in their
commitment in building of houses and development of housing schemes, the
developer must have a paid-up capital of at least 30% of the land and
project costs of the housing project.
“For instance, if the project and the land cost is RM100mil (which is
merely a medium-sized scheme) the paid-up capital should be RM30mil.
This would make the housing industry open to those developers who are
serious and experienced enough to take up a project. The developer
cannot simply rely on the purchaser’s payment of deposits and use the
sales proceed to roll,” he said.
Chang said the developer should have their own funds to be converted to
investment capital, while the balance of project funds would normally
come from their bridging financiers who would, under the current trend,
grant a margin of 70%.
At present developers only need to show they have a minimum capital of
RM250,000 .
Last Thursday, Housing and Local Government Minister Datuk Seri Ong Ka
Ting announced that the RM200,000 would have to be deposited above this
requirement under amendments to the Act.
Chang said the Act should also require the developer to submit a
feasibility study for the Housing Ministry’s scrutiny to ensure that a
project was viable.
He said other provisions needed were for developers to produce
documentation that their financial resources and projects had been
scrutinised by banks or financial institutions.
He also called for individual land titles to be issued for an entire
housing scheme. He said buyers experienced problems in instances where
the developer went bankrupt as technically they did not own the land.
