Issues beyond the gates

26/07/2004 The Star The Edge By S.S. YOGA

THE case in May this year in which a Sierramas resident successfully sued the management company after his house was broken into put the glare of the spotlight on gated and guarded communities. It seems to be a trend lately for developers to come up with more and more of such projects. But will the recent case make them think twice of the inherent risks of legal suits for various problems residents face?

For MK Land Holdings Bhd executive director Datuk P. Kasi, who spoke at a seminar organised by the Malaysian Institute of Architects (PAM) in Kuala Lumpur recently, part of the problem stems from project proponents who promise the Earth and exaggerate the facilities they will provide, which results in many a disgruntled house or property buyer. His solution for developers is simple: “Under-promise and over-deliver.”

That is why Bukit Gita Bayu (a gated development) general manager Liew Tze Yong feels that the housing industry here has to be run on the lines of “build and sell” and not have a show unit that might not be a true reflection of the end product and also cut off the problem of housing projects being abandoned and buyers left in the lurch.

He also points that there is a lot of abuse and corruption going on in the housing sector in which they use cheaper materials than specified or do not do things according to specification. That is why, he says, he prefers to work with foreign consultants and also practises what his mentor the late Datuk Kington Loo taught him – constant monitoring of the project.

“Of course you can’t monitor the whole area, or all the time, but the idea is to do some smart monitoring” so as to pick up on anything not above board, says Liew.

Kasi points out that, in theory, people opt for gated communities because they expect a better-run development than if it were maintained by local authorities. But he adds there are shortcomings as it is difficult to enforce the rules of the community with the residents and the development company might get into difficulties partially due to delinquents in maintenance payments and the area might end up worse off than a regular housing estate. This we have seen especially with many apartment complexes.

Paying the price

With regards to the maintenance payments, it has been the bugbear of many a gated development. How do you get around complainers and defaulters (not that there aren’t some management companies who do a bad job of maintaining their complexes)?

For Liew, it is simple – first show them you mean business. “I’ve taken a few non-payees to court and won and you should see the queue that formed to settle dues once word got around.

“Also, I show that I don’t practise discrimination and even a relative of mine had to park outside while maintenance fees were still not settled and this impressed the rest of the residents.”

He adds that his defaulters only amount to about 5% of the residents and that is much lower than the 30% generally found in the sector. Kumpulan Sierramas (M) Sdn Bhd executive director Bernard Tan says he has co-operative residents who do settle the monthly service charges and he puts it down to having a good relationship with the residents committee.

Liew concurs and adds that if the committee members see that you involve them in the decision-making process and suggestions and or complaints are handled diligently, they will have confidence in the management. He says there was initial opposition from the residents that the management retained ownership of the clubhouse (as normally facilities are co-owned by the residents in a gated community) but he convinced them if they retained it they would not be able to maintain and keep it going and persuaded them to have it open to guests to be profitable.

Still, there are rumblings among residents that since they are paying service charges already for the management company to take care of some of the upkeep, such as the roads, they should be getting a rebate in assessment fees (which are imposed to maintain the infrastructure) from the local authorities.

Liew says they can only ask the local council for an exemption and in Gita Bayu’s case it was not granted but Sierramas residents have been given a rebate. So it looks very much like it is considered on a case-by-case basis and decisions vary among local councils.

Residents spoken to at both communities also agree that for a gated community to work it needs the involvement of the residents themselves who have to take a big interest in how they maintain it. They recognise that eventually there has to be a day when they actually take over the management of the community themselves.

Liew says it would be pointless if he and his staff maintain the place according to everyone’s expectations but once they leave, no one carries on the responsibility. He says that is why he has set up a procedural system for any successor to adhere to.

As for security, there are many ways to put it in place. Security consultant Richard Dimmick, who is managing director of GDSS Systems Sdn Bhd and was at the seminar, notes that security guards play a vital role in the overall security.

“If the guards are not correctly trained and do not know how to respond to an alarm then the cost of the perimeter security system has been wasted,” points out Dimmick.

He has previously been reported in The Edge as saying that Malaysians have been getting “cheap security” and asks how much can you expect from guards who are paid between RM2 and RM2.40 an hour? So a gated development is encouraged to pay more to security guards as their role is of prime importance.

Legislation or changing mindset?

Amendments need to be made to existing land regulations to help regulate the housing sector that deals with gated and guarded communities, say some architects. Architect Dr Tan Loke Mun, who is also Malaysian Institute of Architects (PAM) vice-president, says that current legislation does not facilitate the planning and operations of such projects to the benefit of both developers and purchasers.

“Many of the projects that have advertised themselves as gated and guarded communities have a problem as the individual parcels are under landed titles, which by definition cannot be grouped into gated communities. There is also the option of using strata titles but currently none of the projects has been issued such titles. Even so, the way the current legislation for strata titles is worded has given rise to inconsistent interpretation of the law by the respective land offices,” adds Dr Tan.

Former PAM council member Chee Soo Teng says that Malaysia should adopt an act similar to that used in the state of New South Wales in Australia, which allows for community titles as this would allow the proper creation of gated and guarded communities in which both the developer and the purchaser will then will have to conform to certain guidelines to qualify for this. This, he says, might preclude cases in which security issues became a problem for purchasers.

Gita Bayu general manager Liew Tze Yong, on the other hand, says that changes in legislation would take too long but it is more important to change the mindset of housing developers.

Land matters were formerly under the purview of the now defunct Land and Co-operative Development Ministry and last year it announced that it was looking at formulating legislation for gated communities. Tan says that up till now architects and their related institutions have not been consulted on this amendment and hopes that the new ministry that oversees land matters now, the National Resource and Environment Ministry, would include them in its plans of formulating legislation.

Sierramas executive director Bernard Tan claims the ministry has kept the Real Estate and Housing Developers Association in the loop when it comes to getting input for the changes but wouldn’t elaborate on the details.

Chee says it is time for Malaysia to revise its old land laws, some of which have been around for more than 20 years and are considered archaic and overtaken by new developments in housing. He feels that the ministry does not have to reinvent the wheel, as there are laws in Australia and Singapore that were well established and could be used as a reference.

Still the impression is that gated communities require more land than is required for a normal housing scheme as there are parks, green landscaping and extra amenities to include. Chee says that is not true as there is a requirement in the housing laws to have 10% of the area is devoted to such facilities. When asked about how golf courses and the like could only make up 10%, he says that our country has “enough land to go around” and that the ministry just needs to categorise the land accordingly – a view that Liew concurs with.

When pointed out that land is not just required for housing and that vast tracts are needed for water-catchment areas, environmental protection and for other myriads of activities, they remain silent. Only Bernard Tan agrees that if one included things like golf courses then the land usage might be excessive but still points out that if there is a market for such developments then naturally there will be people willing to tap it.

Still, many of them say they would love an opportunity to create a gated and guarded community composed of just link-houses. – By S.S. Yoga