'Build first, then sell' policy mooted for houses

20/04/2001 Malaysia Kini By Ng Boon Hooi

The government has been urged to implement a 'Build first then sell' concept - where developers can sell their properties only after they are fully-built- to overcome numerous complaints by disgruntled home buyers relating to abandoned housing projects.

Kuala Lumpur and Selangor House Buyers Association (HBA) chairman Zainuddin Bachik said today that the concept would help solve the problem of house-buyers not getting their homes due to abandoned projects.

"Many buyers have paid RM20,000 to RM30,000 and yet are unable to get their houses at the end of the day. This are hard-earned money which they have saved for many years," he said.

Presently, housing developers receive payments from home buyers progressively as their houses are being built over a period of three or more years.

Zainuddin proposed that housing developers should only charge 10 percent of the purchase price from house buyers as down payment, and that no more payments be made until the completion of their projects.

"If the buyers are satisfied with the completed houses, they can pay the payment. If not, they can get their down payment back," he said.

He stated that the 'Build first, then sell' concept was not new and was practiced in developed countries such as Australia.

Zainuddin also deplored the fact that the authorities had failed to take action against developers who had abandoned their projects but were later found to be involved in other housing projects under different names.

10,000 complaints

Earlier, in his speech at the launching of the HBA, Zainuddin revealed that since the 600-member association was set up last July, it has received some 10,000  complaints involving 46 housing projects.

The complaints included those housing projects which failed to take off are those which were abandoned halfway; houses that are of poor quality; late delivery of the houses; late issuance of Certificates of Fitness and strata titles; use of the the inferior building materials and non-compliance to building specifications.

He added that the government should amend exisitng laws besides introducing new ones to protect the interests of house buyers.

Zainuddin said that the Housing Developers Act 1966 stated that the paid up capital of a housing developer should be RM250,000. He suggested a higher amount to be set since a housing project required millions of ringgit.

"Moreover, the down payment collected from the buyers should be kept in separate bank account, so that they can be returned back to the buyers if projects are abandoned or if they fail to take off," he said.

He also proposed that the government review the sale-and-purchase agreement for houses to protect the rights of the buyers as some developers are not abiding to the stipulated conditions.

"The developers and contractors should be held to responsible for poor quality houses. This is because they hired unskilled workers to cut costs,' he said.

Zainuddin also said that claims under the tribunal suggested by the Housing and Local Government Ministry under the proposed Housing Development to handle disputes between developers and buyers should not be limited to RM25,000.

"Low-cost houses in the Klang Valley are costing RM42,000. RM25,000 is little when compared to the losses borne by the buyers," he said.

Advisory board

Meanwhile, Housing and Local Government Minister Ong Ka Ting in his speech said the Housing Development Act, originally named Housing Developers Act, will be tabled in Parliament in July.

He said, under the new Act, the maintenance of condominiums will be managed jointly by the developer and the buyers.

"If they cannot work out the management of maintenance, then the commissioner of buildings will take over to resolve the problem," he said.

He also said the ministry may set up an advisory board to settle minor complaints so that home buyers need not have to go to court to solve small disputes