‘If I were the Housing Minister…”
By Datuk Chang Kim Loong DSPN AMN
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 too 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 who have only an inaudible voice in the wilderness.
HBA would like to welcome the newly appointed Minister of Housing & Local Government, YB Menteri Datuk Seri Reezal Merican Naina Merican and would like to offer our 13 issues or areas which we hope the new Housing Minister would address:
1. Not becoming a tool for industry players
He should not be a publicity tool for housing developers to exploit during the launching of their products and should only support developers who have proven their sense of responsibility and who have impeccable track records. The fact that the Minister ‘cuts the ribbon’ to launch a new housing project means that he has ‘blessed’ and acknowledged that the project will not fail.
2. Plight of victims of abandoned projects
He should seriously look at the plight and nightmares faced by thousands of innocent and unwary house buyers who have lumbered themselves with problems created by errant and unscrupulous developers, and ensure their legitimate rights are not short-changed. He should seek immediate solutions to resolve such unsatisfactory state of affairs and not shirk his duty by exercising and invoking the relevant sections of the legislation to protect the naive and innocent buyers/ victims.
3. Critical situation justifies drastic measures
Further to issue 2, he should see to it that the path that leads to such a pathetic situation is completely blocked. He should encourage measures, including drastic ones (see issue 5), to be promptly executed to relieve the sufferings of innocent house buyers who deserve governmental protection.
He should cast out the safety nets and adopt pre-emptive measures to ensure that such should not happen under his watch.
4. Adopt the BTS 10:90 variant
He should ensure the property industry adopts the Build-Then-Sell (BTS) 10:90 concept − an intermediate variant that hybrids between the Sell-Then-Build (STB) system and BTS where the laws were amended to include the new Schedule ‘I’ and ‘J’ − although on an optional basis, the option being given solely to the developers.
He should see to it that, on a progressive basis, the sales and purchase system adopts the BTS 10:90 model: the ultimate objective being the complete exclusion of the present day STB (progressive payment) system.
He should 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 is disrupted or abandoned, developers will 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 saleable.
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
He should 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. He should instruct his Ministry to fast track all revival applications to alleviate sufferings of affected buyers.
6. Close working relationship with State and Local Governments
He should see to it that his Ministry work closely with the State and local authorities so that problems related to housing can be jointly and speedily resolved. The ‘Compliance Costs’ for development like land premium for land conversion; development charges; submission fee and upfront deposits to local authorities (planning department, building department, engineering department, landscape department etc), cost incurred for SiFus are reduced so that house prices can correspondingly be reduced. Afterall, the developers will factor whatever compliance cost on to their sales price. Hence, the ever escalating house prices.
7. Enforcement of all housing legislations
He should embark on a campaign of vigorous enforcements to ensure offenders will not get away scot-free. He should demonstrate to industry players that the letters of the law will be enforced without fear or favour and that his Ministry means serious business.
Errant and unscrupulous developers who create havoc to the development of the housing industry and tarnish the good name of those responsible ones should be penalised and made examples of to deter would-be offenders.
He should not purportedly, make proposals for new laws to be made by Parliament as if its traditional to do so whenever there is a change of Minister helmed at the Housing Ministry.
8. Enforcement of Tribunal for Homebuyers Awards & Strata Management Tribunal Awards
He should 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 ruling(s) of the Tribunal which was established to allow speedier legal redress for aggrieved house buyers.
He should not spare the individual directors and/or those ‘person having control’ of the development company 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
He should work closely with and provide the relevant non-governmental organisations 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
His long term aspiration should be the total absence of squatters in the country, which can only be achieved by concerted efforts of both the federal and state governments. He should exert his influence to lobby.
11. Establishment of an Ombudsman
He should lobby for the establishment of an Ombudsman within the governmental system so that any grievances against any government department can be speedily and effectively attended to.
12. National Housing Policy
He should get his 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 destructions and damage to resources should be controlled.
Laws should 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 government to impose a mandatory “low-costs housing” category. Have they have been overzealous in carrying out the directives? Has anyone make a last count of low cost units that are available in the market? Has there been 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, their location and pricing?
“They must build the right product at the right place with the right pricing and the right numbers’- National House Buyers Association
But, alas, I am not the Minister of Housing
This article is written by Datuk Chang Kim Loong is the Honourary Secretary- General of the National House Buyers Association (HBA). HBA could be contacted at: Email: firstname.lastname@example.org Website: www.hba.org.my.