Minister won’t extend deadline for developers

The Star 19/11/2002 By Clarence Chua

KUALA LUMPUR: Developers will not be exempted from making penalty payments to house buyers for late delivery due to the shortage of construction workers. 

Housing Minister Datuk Seri Ong Ka Ting said yesterday he would not use his powers under the law to extend the delivery period for developers. 

“Why should we make the buyers bear interest (on housing loans) and protect the developers who are supposed to look into all aspects before starting a project? 

“Well, we won’t do that,” Ong told reporters after closing the Aquatex Malaysia 2002 international flower horn competition and exhibition at the Putra World Trade Centre here. 

Last Thursday, the Real Estate and Housing Developers’ Association Malaysia (Rehda) complained that housing developers would lose RM1.2bil in penalty payments due to delays arising from the acute shortage of construction workers. 

It said based on industry feedback, almost 3,500 or 90% of all projects were now operating with only 30% to 40% of workforce.  

Ong said he had rejected all requests from developers to invoke his ministerial powers under Section 11 of the Housing Developers (Control and Licensing) Regulations 1989 which allowed him to extend the delivery period for projects under “exceptional circumstances.” 

He said the law was clearly referring to circumstances where there were natural disasters or occurrences that were beyond the control and planning of the parties involved. 

He said the developers could not ask for an extension if the delays were caused by negligence or poor planning. 

“That is the message I want to send out. I will be very unpopular with the developers but the so-called powers of the Minister to extend the delivery period must be justified. 

“It must be fair to the house buyers,” he said. 

Under the sales and purchase agreement, developers are given 24 months to complete and hand over the houses to buyers while condominiums take 36 months. Failure to do so will result in late delivery charges payable by the developer. 

National Housebuyers Association secretary-general Chang Kim Loong greeted Ong’s announcement with delight.  

“Developers never fail to impose late payment penalties on house buyers, even when payments are just a little late,” he said when contacted. 

He added that the developers’ woes were a result of their non-adherence to the laws and described the penalty payment amounting to RM1.2bil as “self-inflicted.” 

Chang said developers had been warned that illegal construction workers would be deported and ample time was given.