BANKS must be prepared to lend more support to developers when the build-then-sell concept kicks off next year, Housing and Local Government Minister Datuk Seri Ong Ka Ting said.

Under the 10:90 concept, buyers pay a 10 per cent deposit to lock in their purchases. The remaining 90 per cent is only payable upon completion of the house.

He said since the scheme calls for developers to source 90 per cent of the project cost themselves, banks have a crucial role to make this build-then-sell concept  work.

"Until banks can make a firm commitment to provide adequate funding to projects under the 10:90 system, with transparent guidelines on the criteria required for funding approval, the 10:90 proposal may not achieve the intended outcome," he said at the National Property and Housing Summit 2006 in Petaling Jaya yesterday.

The new system will run alongside the current sell-then-build concept for a two-year trial period, after which the Government will decide whether to make it compulsory.

Ong said without bank loans, only cash-rich developers can afford to fork out the 90 per cent project cost.

"Big companies like these, who cater to high-end property products, do not have many projects. A huge portion of property demand is still for low- and low-middle cost houses. If developers can't get loans, then who will build these houses?" he asked.

Ong said his ministry is in talks with Bank Negara and representatives from banks to come up with a solution on this matter.

Meanwhile, on another issue, Ong said 16 developers have been charged in court for not abiding by decisions of the Housebuyers Claims Tribunal.

He said these developers had blatantly disregarded the tribunal's decisions to award compensation to housebuyers, by delaying or deferring payments to the housebuyers.

"They have shown disrespect to the tribunal and we have to teach them a lesson," Ong said.

According to the ministry's statistics, there were 18,700 claims registered with the tribunal up to July, and of these, 16,183 cases had been settled and 90 per cent of these resolved cases had received compensation.

The Housebuyers Claims Tribunal was set up on December 1 2002 to hear housebuyers' claims involving amounts less than RM25,000.

Under a proposed amendment to the Housing Developers Act, the ministry plans to raise the ceiling for claims heard by the tribunal to RM50,000.

The amendment will also involve six other Acts - Strata Title, Engineers, Architects, Housing, Uniform By-Laws and Drainage and Street Buildings acts.

These amendments are scheduled to be implemented by the first quarter of next year.