Matter of time before concept becomes reality

The Star 01/06/2004 Comment By V.K. CHIN

THE build-and-sell concept is actually the most suitable method for the public to buy houses. It gives those interested the chance to look first at what they are paying for before committing themselves. 

But if it should be introduced it would have very serious consequences on the industry. Many of the developers may have to opt out due to the financial burden they will have to bear. 

Though there may be many developers, most of them just do not have the financial resources to implement such a scheme as they will need to source for their own funds before they can start any new project. 

This is the reality of the situation and that is why they are so fearful of the proposal. The growth of the industry will definitely be affected as there will be fewer players in the business. 

If the concept, proposed by Prime Minister Datuk Seri Abdullah Ahmad Badawi, should be implemented, the number of houses being built will be reduced quite substantially. 

In fact, such an idea is completely alien to them as they have been so used to the sell-and-build way of doing business. This existing method means that they will not be required to have a huge capital outlay before they can start their housing schemes. 

At present, they can sell the houses first and use their customers' money to begin work on the units. They will not be required to source their own funds for this purpose. As far as they are concerned, this is an ideal way of financing their operations. 

While they may wish to stick to the present formula, this situation is quite unfair to the buyers who have to pay for the houses without the benefit of looking at the finished product first. 

They have to depend completely on the developers' integrity and hope that their units will be fit for occupation with the minimum defects when they are handed the keys. 

It is only then that they will know the actual condition of what they have paid for. If they should be unhappy with the quality of the property, they could of course make a formal complaint to the developers. 

While the developers may be prepared to make the necessary repairs, this would usually take some time. If the developers should use delaying tactics to remedy the defects, the aggrieved buyers can seek compensation through the Housing Tribunal or the court. 

At the same time, developers may abandon the projects because of cash flow problems. When this happens, the buyers will be in real trouble as they will be left in the lurch with little or no protection from any quarter except the Government. 

Though the Housing and Local Government Ministry will be looking into the possibility of the viability of the PM's suggestion, the industry must still condition itself that it will be a matter of time before this concept becomes a reality.