"BUILD then sell", said Prime Minister Datuk Seri Abdullah Ahmad Badawi. Minister of Housing and Local Government Datuk Seri Ong Ka Ting expressed support, but urged caution in its implementation.

For his perceived lack of enthusiasm, Ong has been severely criticised, especially in the Internet weblog. Most Malaysians like Abdullah's suggestion because they are convinced that the "sell then build" system has been very unfair to house buyers.

While the call for "build then sell" system should be supported because it is logical, it must not be legislated as the only way to sell houses. A robust housing industry can only be fostered in an atmosphere of competition and choice.

The current "sell then build" system has produced millions of housing units that have provided reasonable shelter to a large number of Malaysians, although many are mortgaged to the hilt.

Indeed, many, especially those who have the means and foresight to buy more than one house, have made substantial amount of capital gains as a result of appreciation in property prices. Of course, many housing developers have become very wealthy in the process.

So have their professional consultants, such as lawyers, architects, engineers and surveyors. But their wealth has not come easily.

Apart from entrepreneurial and technical skills, they have to go to great length to be friendly to government officers and politicians to steer through numerous regulations before the first ringgit could be made.

Unfortunately, the "sell then build" system has a severe weakness. When things go wrong, such as abandonment and shoddy workmanship, those who suffer are the house buyers. Worse, the developers and their professional consultants appear to walk away scot-free.

The vulnerability of house buyers under the existing practice is well understood by the government.

The Housing Developers (Control and Licensing) Act of 1966 and its subsidiary regulations were passed precisely to minimise, if not prevent, exploitation. For instance, the rules require developers to obtain an advertising permit for each project before they are allowed to sell houses.

To get such permits, they must have the necessary planning and building permissions from the local authorities. Furthermore, they can only collect progress payments according to work completed on sites and certified by the architects.

Since 1991, developers have been required to open a development account for each project to ensure that monies collected for a project are not used for other projects or other business ventures.

In 2002, the rules were amended rather drastically to plug loopholes and allow the government more power to regulate the developers. House purchasers now have clear rules to seek compensations in cases of late delivery of houses.

An important step is the creation of the Tribunal for Homebuyer Claims. The maximum amount, however, is limited to RM25,000 each.

It should also be noted that millions of ringgit are allocated annually to support a bureaucracy, headed by Ong, to protect the interest of house buyers according the rules and regulations.

Unfortunately, politicians are still inundated with complaints from frustrated house buyers and these have been highlighted in the newspapers. Are the rules still having weaknesses?

Many of the problems in the press are old ones that, unfortunately, have been allowed to drag on. They are getting the limelight recently because the new and re-elected yang berhormats are keen to demonstrate their grass-root services.

Real Estate and Housing Developers' Association President Datuk Jeffrey Ng Tiong Lip should not have reacted negatively to Abdullah's suggestion by painting likely disastrous implications. He should encourage developers to adopt the system as some bigger ones are beginning to do.

In fact, he should also help the housing ministry weed out unscrupulous developers to minimise the raison d'etre for banning the "sell then build" system. Any abandon housing project is a case too many.

More importantly, the housing ministry must enforce the rules regulating housing developers. The lack of action against errant developers has given the feeling that the government does not care or that there is collusion between its officers and the developers.

Ong must send the message that entering into agreement to sell houses is a very responsible act as part of the push for fostering national integrity. He can accomplish this by throwing the books at the chief executive officers and directors of errant companies.

Amend the rules to make punishment more painful if need be. Also, concrete steps should be taken to encourage and facilitate the "build then sell" concept.

Under such an environment, let the developers decide which method to sell their houses and educate the house buyers to choose wisely. This is the best way to foster a robust housing industry.

Dr Goh Ban Lee can be reached at banlee@usm.my.