Homeowners unknowingly sold bumiputera lots, slapped with RM13m penalty fees

• “The Selangor Land and Mines Office (PTGS) is refusing to release the titles unless we pay a 12% penalty.”

PETALING JAYA (Nov 7): Hundreds of homeowners never knew they were sold bumiputera lots and are now faced with a total of RM13 million in penalty fees. 

All the 574 owners in Rawang have owned the properties for more than a decade, according to a report by StarMetro yesterday.

One of the homeowners was given a notice early this year from the liquidators of the now bankrupt developer, demanding the payment of the substantial penalty fees, which is required to get the Selangor Housing and Property Board (LPHS) to transfer the bumiputera lots to non-bumi owners.

The homeowners were shocked since they had paid the full amount for their properties, and there was no discount or indication in the sale and purchase agreements that they were bumiputera units. Typically, bumiputera units are entitled to discounts ranging from 7% to 15%.  

“The Selangor Land and Mines Office (PTGS) is refusing to release the titles unless we pay a 12% penalty,” said Susan Lawrence, one of the affected buyers. 

“When you look at a bumiputera lot and see an Indian name attached to the title, wouldn’t this trigger alarm bells?” said Shawn Nair, another affected homeowner, believing the issue should have been caught from the start.

According to documents seen by StarMetro, a minimum of 40% bumiputera quota with a 10% discount was approved by the Selangor State Executive Council (MMKN) for the Rawang project on July 9, 2001.

However, the now defunct developer had breached the allocation quota for bumiputera lots, selling approximately 90% of the units to non-bumi buyers without applying for blanket consent, as discovered by the liquidator later.

The notice from the liquidator also stated that after contacting LPHS, the state housing board still sought penalties for breaching the bumiputera quota but was open to offering discounts to the affected buyers. 

The English daily also reported that about 200 homeowners in a Subang Jaya project by another developer are facing a similar issue and forced to pay an extra 12% of the purchase price. 

The Selangor Housing and Culture Committee chairman Borhan Aman Shah stressed the importance of preventing companies from profiteering on the situation and the need to identify the developers involved.  

“As administrators, we have rules that can affect their development plans if they do not follow government policies,” he said in the news report, warning that failure to comply with the bumiputera quota policy could affect the companies’ future projects in Selangor.  

Go after the directors, say lawmakers

Selayang Member of Parliament William Leong and Subang Jaya assemblyman Michelle Ng, who were contacted by their constituents on the issue, are pressing the Selangor government for accountability. 

Emphasising the need to go after the company directors instead, Leong said it was unfair to punish the innocent buyers when they did not profit from the sale.

“Since the company (for the Rawang project) is in liquidation, the correct way is to file a proof of debt and go after the directors,” he said.

He also said he had sent a letter to the LPHS’ executive director Datuk Dr Juhari Ahmad, requesting a meeting to address the matter, the news channel said.

Ng, on the other hand, proposed for the implementation of an improved reporting system and mandatory bank guarantees provided by the developers to prevent the overselling of bumiputera lots. She stressed that the two would offer better accountability and transparency to the system.

She also suggested amending existing laws to hold company decision-makers personally liable should such cases arise.

“This is so that no one can escape culpability by winding down companies,” she said in the StarMetro report. 

Ng said there was one ongoing case of overselling bumiputera lots in her constituency, where she repeatedly raised the matter in state assembly sittings, with the most recent one in March.

According to Selangor Housing, Urban Well-being and Entrepreneur Development Committee chairman Rodziah Ismail, the state government was evaluating a mechanism to prevent developers from breaching the bumiputera quota. 

She added that non-compliance or selling bumiputera lots to non-eligible buyers would lead to the suspension of blanket approvals. Stricter penalties, such as blacklisting board members and limitations on future projects in Selangor, could also be imposed on developers.

It was reported that talks were planned with relevant departments, such as PTGS, State Legal Advisor’s Office and National House Buyers Association to initiate this process.   

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