A season of hope ...
14/01/2006
NST-PROP
By Salleh Buang
High on my wish list for 2006 is an end to the perennial problem of
abandoned housing. The reason is that while I am an optimist by nature, past
events have made me realise that the build-then-sell concept becoming
reality stands a very slim chance.
The realist in me says that for as long as we stick to our old practice of
selling, then building abandoned projects will continue to feature in our
landscape in the years ahead. Despite being mooted by none other than Prime
Minister Datuk Seri Abdullah Ahmad Badawi early last year, I have no
confidence at all that build-then-sell will gain momentum - or get past
Cabinet to become a brand new Executive policy.
It is not that the National House Buyers Association (HBA) and other NGOs
have not done their work. They have, and I believe they still are, working
hard to get rid of the sell-then-build mode of housing delivery. Or, at the
very least, trying to get it modified to some extent to strike a fair
balance between developers and purchasers.
However, the housing industry’s lobby in the corridors of power is still a
force to be reckoned with and so for the HBA and the others, the uphill
battle continues.
Will the status quo remain in 2006 or will it change? While my heart hopes
so, my head tells me otherwise. While you ponder your own response, let us
look at some official statistics provided by the Housing and Local
Government Ministry.
In 2004 alone (the figures for 2005 have not been posted yet) the ministry
issued a total of 1,070 new housing developers’ licences and renewed another
354. During the last 15 years, from 1990 to 2004, a total of 12,076
developers’ licences were issued, while another 5,639 licences were renewed.
In the area of abandoned schemes, the ministry said in 2004 alone, 227
projects were neglected, affecting 75,356 housing units. Unfortunately, the
data does not specify the types of houses, their price range and so on.
What we are told is that these abandoned houses are in every State - from up
north in Perlis, where three projects were abandoned, to the south in Johor,
which has 19 projects abandoned. As expected, Selangor accounted for the
highest number, with 55! Yes, the country’s only developed State has the
dubious honour of having the highest number of rogue developers.
Second comes Penang (24 projects), followed closely by Negeri Sembilan (22),
Pahang (21) and Perak (19).
The financial cost of these 227 abandoned projects is RM7.03 billion.
The Housing Ministry has repeatedly told house purchasers that not every
abandoned housing project can be rehabilitated. Abandoned projects are
generally divided into two categories - the first is described as those with
the “potential” of being rehabilitated, while the second is said to be
projects “beyond hope”.
According to the ministry’s data, the number of abandoned housing projects
“berpotensi dipulihkan” (with potential of being rehabilitated) covering the
15 years between 1990 and 2004 is 1,412.
Despite this volume, the ministry said the actual number of abandoned
housing projects successfully rehabilitated, complete with issuance of
Certificates of Fitness (CFs) or temporary CFs, during the same period is
3,565.
The only explanation for the discrepancy in these annual figures is that
actual rehabilitation work in any given year must also take into account the
cumulative number of projects abandoned prior to 1990.
Statistics, though helpful in our survey, cannot reveal the agony and tears
of those who have suffered at the hands of rogue developers. Last month, a
media report told about the sad tale of 47 house buyers of Taman Kencana
Phase three near Ampang in Selangor.
These people had been waiting for more than 10 years for their dream houses
to be completed. They signed their Sale and Purchase Agreements (SPA) with
the developer in 1993, with the view of occupying their units by 1995. They
did not. In 2000, the developer folded up and the Official Receiver took
over.
What is regretful, according to one of the affected purchasers Husin Abdul
Ghani, is that despite having taken over the affairs of the developer some
five years ago, the Official Receiver has not given the purchasers any
feedback on the status of the project.
I discussed this matter with a senior lawyer, asking him about the seemingly
indifferent attitude of the Official Receiver to the plight of the
purchasers. He is of the opinion that the real problem is that the receiver
- a Government official - does not have any clue as to the steps he should
take to resolve the problem.
Obviously, that officer needs an urgent refresher course in housing law, an
area in which he apparently lacks. A real tragedy indeed - if my friend’s
assumption is correct.
The Ampang case is not the only story of a public agency’s inability to help
purchasers victimised by rogue developers. Another story I came across in
August 2004 concerns the Tribunal for Homebuyer Claims, which was
established when the Housing Developers Act was revamped in 2001.
In the report published by a leading Malay newspaper, a tribunal spokesman
said the panel “is in no position to give any help or provide any legal
remedy” to purchasers whose housing projects have been abandoned by
developers.
Such purchasers cannot file their claims with the tribunal. Their only
remedy, the spokesman said, would be to report the matter to the ministry’s
Enforcement Division, which would then initiate the necessary resolution.
This response came in the tribunal’s reply to a query raised by one of the
purchasers of the Lembah Beringin housing project, undertaken by a
subsidiary of the Land & General Group of Companies. The project began in
1997 but has since been abandoned.
As you peer ahead into 2006, the question would be, “So, what else is new?”
You buy a house from a developer, persuaded by claims published in a glossy,
illustrated brochure. Many years later, after spending a lot of money, the
project is abandoned. Bankruptcy had caused the developer to fold up, or
simply disappear.
You go to the Official Receiver for help, but you do not get any. You go to
the housing tribunal, but you are told that under the law, it is unable to
help. So you go to the Housing Ministry, which says that your housing
project has “no potential” of being rehabilitated!
You planned to buy a dream home, but you ended up with a big debt and bigger
heartache.
The only thing left for you to do is get together with the other distressed
and angry purchasers and stage a demonstration in public, putting pressure
on the developer (if it is still around) to do something. And, pray that the
developer will respond favourably.
The last thing you will expect is a RM50 million defamation suit filed
against you by the developer. But that is what happened in Bukit Mertajam in
December 2005. However, this is another story.
If this collection of tragic tales does not convince you of the need for the
build-then-sell system of housing delivery, then I do not know what else
will ... .
Salleh Buang is senior advisor of a company specialising in competitive
intelligence. He is also active in training and public speaking and can be
reached at sallehbuang@hotmail.com
