Property Chat: If I were the Housing Minister

The National House Buyers Association (HBA) is appreciative of the housing in­dustry’s significant contributions to our country’s economic development and likewise mindful that house buyers play an im­portant role as the industry’s customers.

For the industry to be sustainable, HBA strongly feels that the interests of both the developers and house buyers need to be taken into account, espe­cially those of the latter, whose cries of distress in the “wilderness” are often unheeded.

Hence, HBA would like to welcome the newly appointed Minister of Housing and Local Govern­ment, YB Datuk Seri Reezal Merican Naina Merican, and with a new Minister, we hang our new hopes for the long-standing problems in the industry to be resolved under his watch.

Here is a list of 13 issues which I would address if I were the housing minister, and we hope the Minister in office will tick for himself whichever is applicable.

 1. Not a tool for industry players

 I would not be a publicity tool for housing developers to exploit during the launching of their products and would only support developers which have proven their sense of responsibility with impeccable track records. Because when the Minister “cuts the ribbon” to launch a new housing project, it implies that he gives his blessings to a project that would not fail.

2. Address plight of victims of abandoned projects

I would seriously look into the plight and alleviate the nightmares faced by thousands of innocent and unwary house buyers who are shackled with problems created by errant and unscrupulous developers, and ensure their legitimate rights are not short-changed.

I would seek immediate solutions to resolve such an unsatisfactory state of affairs by exer­cising and invoking the relevant sections of the legislation to protect the unwitting victims and not shirk my duty.

3. Critical situation justifies drastic measures

On the same note, I would see to it that the path that leads to such a pathetic situation is completely blocked. I would promptly execute measures, in­cluding drastic ones (see point no. 5), to relieve the sufferings of innocent house buyers who deserve the government’s protection. I would cast out the safety nets and adopt pre-emptive measures to ensure that such atrocities would not happen under my watch.

4. Implement BTS 10:90

I would ensure the property industry adopts the build-then-sell (BTS) 10:90 concept − an intermediate variant between the sell-then-build (STB) system and BTS.

The laws have already been amended to include the new Schedule I and J to provide for the BTS 10:90, but it is currently on an optional basis, the option being given solely to the developers. Hence, I would see to it that, on a progressive basis, the sale and pur­chase system adopts the BTS 10:90 model, with the ultimate objective being the complete exclusion of the present day STB (progressive payment) system.

I would draw a road map to attain this objective. Many countries in the region have adopted the BTS concept, so there is no reason why local developers cannot do likewise.

Under the BTS 10:90 concept, developers may sell their products before they commence construction when all the necessary approvals (layout plans, build­ing plans, accessory plans, etc.) have been obtained. Buyers sign the sale and purchase agreement and pay a deposit of 10% of the selling price and make no more payments until the houses are complet­ed with certificate of completion and compliance (CCC), water and electricity available for tapping and running as well as vacant possession with keys.

The risk of abandoned projects is thus totally re­moved. If construction of the houses were disrupt­ed or abandoned, developers would be the ones to bear the brunt. Quality of houses will also improve with the BTS 10:90 concept because developers will have to execute greater care to ensure they are con­structed in accordance with specifications and proper workmanship so that the finished products are sellable.

The risk faced by developers that the buyer may refuse to complete the sale when the property’s price has dropped at the time of handover will be negated by forfeiting the initial 10% deposit plus other possible specific performance liabilities.

5. Forfeiture of land in abandoned projects

I would lobby for the state authorities to take dras­tic measures, including forfeiture of land on which abandoned projects are sited so that the projects can be revived and the completed homes delivered to their rightful purchasers or owners. I would instruct my Ministry to fast-track all revival applications to alle­viate the predicaments of affected buyers.

6. Close working relationship with states and local governments

I would see to it that my Ministry works closely with the states and local authorities so that problems re­lated to housing can be jointly and speedily resolved.

The compliance costs for developments like land premiums for land conversions; development charg­es; submission fees and upfront deposits to local au­thorities (planning department, building department, engineering department, landscape department, etc.), cost incurred for SiFus (Certificate of Share Unit For­mula) would be reduced so that house prices can cor­respondingly be reduced. After all, the developers will factor in all compliance costs onto their sale prices, leading to the ever-escalating house prices.

7. Enforcement of all housing legislations

I would embark on a campaign of vigorous enforce­ment to ensure offenders will not get away scot-free. I would demonstrate to industry players that the let­ter of the law will be enforced without fear or favour and that my Ministry means serious business. Errant and unscrupulous developers who create havoc to the development of the housing industry and tarnish the good names of the responsible ones would be penalised and made examples of to deter would-be offenders.

I would not propose new laws to be passed by Par­liament as if it’s a tradition to do so whenever there is a change of minister.

8. Enforcement of tribunal awards

I would see to it that all awards meted out by the Tri­bunal for Homebuyers are promptly complied with by the defaulting developers and that recalcitrant devel­opers will face criminal charges under Section 16AD of the Housing Development (Control and Licensing) Act 1966 and similarly under the Strata Management Act. Penalties include fines of RM10,000 to RM50,000 or a maximum two years’ imprisonment. This should ensure developers respect and promptly comply with the rulings of the Tribunal which has been established to facilitate speedier legal redress for aggrieved house buyers.

I would not spare the individual directors and/or those “persons having control” of the development companies who should be serving jail sentences (for failure to abide by the Tribunal awards) instead of their wage earners or employees.

Similarly, the awards of the Strata Management Tribunal must be equally obeyed.

9. Better support for NGOs

I would work closely with and provide the relevant non-governmental organisations (NGOs) greater moral and financial support, if required, as they can become his Ministry’s source of feedback and inputs for the rakyat’s benefit.

10. Sufficient affordable housing for the people

My long-term aspiration would be the total absence of squatters in the country, which can only be achieved by concerted efforts of both the federal and state gov­ernments. I would exert my influence to lobby for such an eventuality.

11. Establishment of an ombudsman

I would lobby for the establishment of an ombudsman within the governmental system so that any grievances against any government departments can be speedily and effectively attended to.

12. National housing policy

I would get my Ministry to urgently draw up a com­prehensive national housing policy to provide a firm direction for matters on housing in Malaysia. Factors such as environmental destruction and damage to re­sources would be controlled.

Laws would be strictly enforced to ensure the well­being of the people and future generations. It is vital that infrastructural, industrial, economic and com­mercial developments are not at the cost of our health.

13. Single umbrella to coordinate distribution and availability

It seems that the local councils and land offices have their own respective directives from their state gov­ernments to impose a mandatory “low-costs housing” category. Have they been overzealous in carrying out the directives? Has anyone made a last count of low-cost units that are available in the market? Is there an overhang of such properties?

Why isn’t there a single umbrella (federal) or data bank where information can be collected to coordinate the total numbers of such units built, under construc­tion and those under planning, and their locations and pricings? They must build the right product at the right place with the right pricing and the right numbers.  

But, alas, I am not the Minister of Housing.

Datuk Chang Kim Loong is the Honourary Secretary-General of the National House Buyers Association (HBA).
HBA could be contacted at: Email: [email protected]
Website: www.hba.org.my
Tel: +6012 334 5676