Ethics lie buried in builders'
accounts
The Sun
31/7/2004
I SYMPATHISE with readers who signed off as "Cheated Owners" and
Jagdish Chandra whose letters were published last week.
They had discussed the problems faced by condominium and apartment
buyers whose money the developers and the management companies had
misused.
Most, if not all residential strata owners face the same dilemma.
The lower or cheaper the type of apartments or condominiums, the
worse the problems become.
It is safe to say that nearly all (maybe 90-95%) apartments or
condominiums do not have proper accounts (as required by the law),
let alone have audited accounts.
Can you imagine what will happen if you have laws specifying that
directors will be sent to jail for failing to have proper audited
accounts for strata developments?
Our prisons will be full with company directors, including Tan Sris
and Datuks from listed companies. Ironically, maybe that is the only
way to make developers accountable.
To developers, profitability is all that matters.
Property management and maintenance is a waste of time and a
liability. Thus, company directors tend to wash their hands off the
problems and leave them to the juniors to resolve.
Even in properly maintained accounts, one can find a lot of
irregularities and unethical practices even by subsidiaries of
public listed companies.
In one instance, a reputable listed company is known to bill each
condominium owner secretly RM50 every month for management fee.
This is unethical and morally wrong as it is the duty and
responsibility of the developer under the law to provide these
services, where only the expenses are passed on to the owners.
With more than 3,000 units, the developer can record profits of some
RM 1.8 million a year.
But it takes an experienced and knowledgeable person with trained
eyes to be able to tell what is morally and ethically right.
Can you imagine if the developer is not a subsidiary of a listed
company.
Strata residential owners have no chance and are left entirely to
the mercy of developers without any protection from the law.
My advice to potential house buyers is do not buy apartments or
condominiums unless you are looking for headaches and nightmares
arising from abandoned projects, shoddy workmanship, poor
maintenance and missing funds.
It is sad but true that our property industry, particularly the
strata developments have not reached a professional level where
consumers' rights are adequately protected either by law or by
conscience.
Jimmy Lim
Kuala Lumpur
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