Honestly, folks …

NST-PROP 25/05/2001 By Jennifer Gomez

Housing Ministry to clamp down on developers who misrepresent in advertisements

Creative but honest advertisements for housing projects may soon become the norm once the Ministry of Housing and Local Government starts clamping down on developers who put in ambiguous and non-factual statements in their marketing materials.

The Ministry recently made a decision to be more stringent when approving advertisements by developers and will strike out vague or misleading claims in marketing materials submitted to its Licensing and Monitoring Division (LMD).

A Ministry source said from now on, developers would not be allowed to state the travel time taken from their projects to a certain area. Instead they would be limited to stating the exact distance in kilometres or miles.

Developers would also not be able to proclaim their plans to build a highway that would improve accessibility unless they can substantiate the claim.

The Ministry's decision to scrutinise and limit developer's advertisements comes in the wake of a call by House Buyer's Association chairman Datuk Zainuddin Bachik for the authorities to address the issue of developers making false and empty promises to promote the sale of their properties.

'Factual information is needed here and not gimmicks that are intended to entice house buyers. We call upon the licensing body in charge to exercise rigid control over advertisements," Zainuddin had said.

Zainuddin said often developers had boasted in their advertisements of "breathtaking views of rolling green hills or of a prominent landmark such as the Petronas Twin Towers but in reality there are no rolling hills and the promised landmark is barely visible once the project is completed."

He said developers had also promised that their projects would have plenty of landscaped green space, but all residents get at the end of the day is a concrete jungle.

Developers told to put in factual information

"In addition, certain developers advertise facilities such as an Olympic-sized swimming pool, gym and so on, but these are not delivered upon completion of the project, or if they are, they are nothing what has been depicted. What you see on the brochure is definitely not what you get," Zainuddin said.

The Ministry source said in the past, the LMD officers' emphasis ha been on checking whether the advertisements contained the developer's license and advertising permit numbers and their validity period, as well as the number of units to be sold with their minimum and maximum price. However, he said from now on, all advertisements would also be srutinised to see if there are vague claims made by developers.

"The normal procedure is for the developer to send in a copy of the advertisement to the Ministry's LMD. The approval process could take up to one month. In the meantime, daily checks are also conducted by Ministry's enforcement officers who scrutinise the advertisements placed by developers in the local dailies to ensure that they are not different from the ones approved by the LMD," said the Ministry source.

"If found to be different, action would be taken against the developer and depending on the seriousness of the non-compliance, the Ministry could take the developer to court," the source added.

According to the Ministry's statistics, there were nine cases where the advertised version was different from the advertisements approved by the Ministry's authorities in 1999. This number was greatly reduced the following year, where there were only two such cases.

In 1999, about 703 advertising and sales permits were issued to developers, representing 13 per cent more than that approved the previous year. The validity period for the advertising and sales permit is three years for landed developments and five years for stratified developments.

"Before, we were quite lax on certain requirements because we were trying to boost the property market and so wanted to encourage more development. Because of this developers were given the go ahead to build without having obtained certain approvals but of course, they were expected to obtain them within the extended period given. However while some responsible developers honoured their end of the deal, others did not," said the source.

When contacted on the issue of misleading advertisements, Real Estate and Housing Developer's Association president Datuk Eddy Chen said while developers should not mislead buyers with false statements, they not be limited in their advertisements as it would curb creativity in marketing.

"Advertising gimmicks are used in the promotion of all products, without them there would be no creativity when packaging the product," he said.

"While Rehda believes that developers must refrain from giving false promises, we also advise buyers to be more discerning before committing to a purchase. They should make the effort to visit the project site, question the developer closely and also speak to their friends who are more knowledgeable and not just wholly trust what is stated in an advertisements," Chen said.

What to look out for in a developer's advertisement

Housing developers are required to include the following information in their advertisements:

• The developer's licence number and its validity period.

• The advertising and sales permit number for the project and its validity period.

• Name of approving authority for the building plans and the building plan reference  number.

• Name and address of the developer

• Land tenure

• If there is a charge on land

• Name of the project

• Type of housing unit being sold and the number of units

• Minimum and maximum price of the units for sale.

• Marketing agent (if any)