|Minister mulls use of section 11
NST-PROP By Nicholas Mun
The property industry possibly be on
the verge of breaking new ground in terms of consumer protection. The
Minister of Housing and Local Government Datuk Seri Ong Ka Ting is
considering exercising his powers under section 11 of the Housing
Developers (Control and Licensing) Act, 1966 (HDA) in respect of the
Majestic Heights project. Section 11 of the HDA empowers the Minister to
give directions for the purpose of safeguarding the interests of
The the Majestic Heights project project in Paya
Terubong, Penang was first launched in 1994 offering 2955 residential
units, 55 shops and 22 light industrial lots. The project which was being
developed over four phases ground to a halt in 1997 leaving the properties
in various stages of completion but a large number of which were fully
The purchasers then organized themselves in four
committees for each of the four phases to resolve the matter. Since then
the committees have merged and the plight of the purchasers is being taken
up y what is known as the Ad Hoc Committee for Taman Terubong Indah
(Majestic Heights) Purchasers.
Crucial to the Ad Hoc Committee’s success in getting the
Minister to consider invoking section 11 of the HDA was the involvement of
the Penang Chief Minister Tan Sri Dr Koh Tsu Koon. The Ad Hoc Committee’s
advisor S.L. Chang said the Chief Minister had attended a purchasers’
forum on May 27 and had since then been meeting regularly with the
“We had a series of meetings in July with the Chief
Minister and have informed him that the purchasers were determined to go
all the way,” said Chang.
On Aug 15, Koh had appealed to Ong to help resolve the
matter. According to Koh the petition to wind up the developer filed by
the purchasers would be time-consuming with a long wait for the project to
be revived. Because of this stalemate, Koh felt the minister should use
his power under section 11 to intervene as requested by the purchasers.
Koh also said he had proposed to the ministry that a suitable property
developer be selected to complete the project which the Housing Minister
can then pursuant to his powers under section 11 direct to take over the
The efforts of the Ad Hoc Committee culminated in a
meeting with Ong attended by its representatives and Koh himself on Aug
29. During the meeting, the Ad Hoc Committee’s representatives made a case
for the invoking of section 11(1)(d) of the HAD supported by a letter from
Koh to the same effect. Section 11(1)(d) empowers Ong to direct the
developer to present a petition to the High Court to wind up its business.
Chang said section 11(1)(d) was the most appropriate
directive given the circumstances and because it provides the purchasers a
clean break from a many problems that be set the project allowing them to
rehabilitate it on their own through the appointed provisional liquidator.
Aside from this, Chang pointed out that failure to obey such directives is
an offence under the HDA whereby the developer on conviction is liable to
be fined or imprisoned.
“By having the company wound up, the purchasers will not
have to be concerned with the debts of the company ad so there will be no
hindrance to completing the project. All the purchasers want is to
complete the work and they will be coughing up their own money to
rehabilitate the project,” he explained.
According to Chang, Ong had requested the Ad Hoc
Committee to take some time to consider the possibility of invoking
section 11(1)(c) instead and revert to the ministry through another
meeting with its legal department as to whether they are agreeable to
this. Section 11(1)(c) empowers the Housing Minister to direct a company
to assume control and carry on the business of a developer.
Chang is however optimistic that the section 11 will be
invoked notwithstanding the fact that matter will be studied by the
ministry’s legal department and forwarded to the Attorney-General’s
chambers before any decision is made.
“I’m confident that he will invoke it. The only question
is whether he will invoke section 11(1)(c) or (d),” said Chang who added
that the committee has yet to receive notification on the meeting the
ministry’s legal department. He also said the committee will be informing
the ministry that it is maintaining its stand on the applicability of
Undoubtedly consumer rights’ bodies such as the House
Buyer Association (HBA) will be closely observing the developments of the
Majestic Heights project. And if the matter is resolved in favour of its
purchasers, it will be the first time since the enactment of the HDA that
a Housing Minister invokes his power under it for the protection of house