It's good for both buyers and builders

It's good for both buyers and builders

21/05/2009 New Straits Time By : L.K.T. , Bukit Mertajam

I REFER to the letter "It shows failure of present system" (NST, May 18). I agree that the issue of abandoned housing projects in the country can be resolved by doing away with the sell-then-build (STB) system in housing transactions between developers and house buyers.

The Housing and Local Government Ministry should aggressively enforce the implementation of the build-then-sell (BTS) or the 10:90 system. The latter is more equitable to both developers and house buyers.

The STB system is flawed and outdated, as evident in the large number of abandoned houses that dot the Malaysian landscape. This system also forces buyers to be at a greater risk than the developers in the business of selling and purchasing houses.

Many errant developers are let off lightly, which does not serve as any deterrent but only encourages rogue developers to participate in the housing industry, thus aggravating the problem of abandoned housing projects.

House buyers who are victims of failed housing projects are left in the lurch. Some developers do not even have the courtesy to inform buyers of the stalled projects. Only the banks keep up communication with buyers who have taken a housing loan to remind them of their monthly interest payments.

The BTS system is a better option as it ensures that houses built by the developers and completed within the stipulated period are delivered to the buyers upon obtaining the certificate of occupation. While developers make a cut in the sale, buyers are happy as they get to see their dream come true.

In the BTS system, developers may incur extra cost. Nevertheless, the developer can factor the extra cost into the asking price of houses for sale to be borne by the buyers.

For a win-win situation between developers and house buyers, the BTS system is the way to go.