Build-and-sell pledges sought

24/09/2005 The Star

KUALA LUMPUR: The Government wants the various sectors involved in the housing industry to state what they are willing to commit to, should the “build first, sell later” concept of housing development be implemented.

Housing and Local Government Minister Datuk Seri Ong Ka Ting said he would need firm commitments from them before presenting a paper on the concept to the Cabinet.

Among those involved are bankers, housing developers, housebuyers, architects and contractors.

For example, Ong said the ministry needed to know whether banks were willing to commit to giving developers and housebuyers loans if the build-and-sell concept was implemented.

“We had some verbal agreements during discussions but the situation seemed to change at subsequent meetings,” he said at a press conference after launching the Mapex 2005 property exposition at the MidValley Exhibition Centre here yesterday.

Ong was asked about the progress of his ministry’s study on the build-and-sell concept.

The study was carried out after Prime Minister Datuk Seri Abdullah Ahmad Badawi said housebuyers needed to be protected against losing their lifetime savings should they invest in housing projects which were later abandoned.

The House Buyers Association has been calling for the build-and-sell concept and had asked for the “10:90 model” practised in Australia.

The 10:90 model requires a house buyer to pay 10% of the purchase price into an escrow account held by stakeholders as deposit, while the remainder is paid when the house is completed.

Ong said a draft of the Cabinet paper had been prepared and would be circulated among government agencies for comment after firm commitments had been received from the various parties.

Ong also said his ministry was preparing files on 112 developers so that they could be charged for criminal contempt of court for failing to abide by the decision of the Tribunal of Homebuyers Claims.

He said of the 14,231 cases filed with the Tribunal between 2003 and last August, 12,709 had been resolved. The bulk of these cases were claims for late delivery payments.