But all these do not seem to impress the proponents of BTS who still feel that this is one concept which Malaysia should embrace as soon as possible. But groups like the National House Buyers Association do acknowledge that it may be too early for us to adopt a full form of BTS. 

So they are now supporting a hybrid form of BTS whereby a developer can sell housing units before completion, but he may only collect a certain percentage of the purchase price (e.g. 10%) upfront with the balance payable only upon delivery of the housing unit with CFO. This system, first mooted by Ong, is better known as the 10/90 system. 

The idea first came about in July 2004 after Ong’s trip to Australia to study the BTS concept practised there. 

It appears to be modelled upon S9AA of the Sale of Land Act 1962 of the State of Victoria (see box). 

Much has been written elsewhere about the merits of the 10/90 system. But what are some of its drawbacks? 

Firstly, section 9AA is not about selling and delivery of a housing unit. It is about a sale of land prior to the approval of plan. Thus in comparison, the issue of fairness does arise whether 10% is a reasonable sum to bind a developer as it is more akin to a situation where the winner takes all and the loser loses everything. 

Secondly, is it fair for the purchaser to opt out of the sale if the completion of his housing unit is delayed when he can be adequately compensated with damages for late delivery? 

Further, can a purchaser also opt out for any other reason? Whilst a developer is most likely to get the purchaser’s financier to undertake to pay the 90% of purchase price upon completion, there is really nothing to prevent a purchaser to opt out, say if upon completion the property price should plummet to a level which does not make sense for the purchaser to continue with his purchase.  

Under these circumstances, is the developer entitled to specific performance? If not, will this not lead to the completed project being abandoned? 

It is envisaged that under this practice, the developer will impose many conditions allowing him to withdraw from the contract, for example, if not many units are sold.  

Financial institutions may not also come on board to finance a project unless a certain number of units have been pre-sold. 

Therefore, is Schedule G or H SPA still required to be used? If so, it really does not make a lot of difference from the present system and the 10/90 system may in fact cause the purchaser to be embroiled in more legal battles over the current usual late delivery and poor workmanship complaints.  

In this respect, it may not be so attractive for the developers to adopt the 10/90 system if they still have to comply with the existing strict housing development laws and State Governments’ polices on bumiputra ownership, low-cost housing and improvement service funds for infrastructure. 

In fact, we should pride ourselves as one country which requires developers to follow a statutory SPA and open a housing development trust account compared to other countries which practise the STB concept.  

What is more important is the provision of affordable housing to the people. The BTS and 10/90 concepts are more commercially-driven with little emphasis on the social aspect of a housing development.  

While the purchaser’s rights may be strengthened under the 10/90 concept, he may be more disadvantaged economically as his need for affordable housing may no longer be within his reach. 

We should focus more on the enforcement aspect and give a little more time for the 2002 amendments to bite in and if necessary, strengthen further the current laws. 

Since the revamp of the housing laws in 2002, we have seen a vast improvement in the housing industry – reduction in abandoned projects, effective enforcement and effective dispute resolution by the Tribunal for Home Buyer claims.  

It may be too soon to adopt a system which is not universally practised.