Forum: Isu-isu Perlembagaan Melibatkan Agama Islam

INSTITUTE FOR GOVERNANCE AND INNOVATION STUDIES

UUM COLLEGE OF LAW, GOVERNMENT AND INTERNATIONAL STUDIES

Forum Isu-isu Perlembagaan Melibatkan Agama Islam

Pada 26 Mac, 2013 (Selasa), bertempat di Dewan Seminar B, Pusat Konvensyen, Universiti Utara Malaysia.

Ahli-ahli panel:

1) Professor Datuk Dr. Zainal Kling, Professor UUM Colgis – penceramah pertama

2) Dato’ Hj. Zainul Rijal Abu Bakar – Presiden Persatuan Peguam Muslim Malaysia, penceramah Kedua

3) Dr. Nuarrual Hilal Md Dahlan – Pengarah, Institute for Governance and Innovation Studies, UUM COLGIS, sebagai moderator

Tajuk forum di atas merupakan tajuk biasa dan lama. Namun berdepan dengan pelbagai isu-isu semasa tajuk forum ini masih lagi bersifat ‘evergreen’ dan segar khususnya dalam pembahasan ilmiah, professional and diskusi akademik mutakhir serta relevan dalam menggariskan dasar-dasar Negara.

Ugama Islam telah diletakkan pada kedudukan yang istimewa menurut Perkara 3(1) Perlembagaan Persekutuan. Ianya telah dijadikan agama Persekutuan.

Namun begitu, isu-isu yang timbul sejak akhir-akhir ini yang menggugat kemuliaan dan kesucian Islam itu sendiri.

Menurut ahli forum pertama, Professor Datuk Dr. Zainal Kling, Professor UUMCOLGIS agama Islam telah bertapak di Nusantara dan Kepulauan Melayu sejak abad yang 11. Pada mulanya Islam dianuti oleh komuniti-komuniti kecil hasil dakwah yang dibawa oleh pendakwah Islam Asia Barat dan India. Kemudian Islam telah diterima oleh masyarakat dan negeri-negeri di Nusantara. Pemerintah-pemerintah dan raja-raja Melayu telah memeluk Islam sebagainya contohnya Sultan Malikul Saleh, pemerintah negeri Pasai, Utara Sumatera. Islam telah menjadi suatu agama rasmi empayar-empayar melayu sebermula abad yang ke 13 sehingga ke hari ini, melenyapkan sama sekali pengarah agama Hindu dan Buddha yang telah dianuti sejak zaman berzaman sebelum itu. Walaupun kedatangan pengaruh Portugis, Belanda dan Inggeris yang rakus dengan dasar mereka – God, Gold, Glory, termasuk menyebarkan agama Kristian di kepulauan dan negeri-negeri Melayu, namun, Islam masih lagi dapat bertahan dek menghadapi pengaruh-pengaruh mereka. Pada hemat mantan professor Universiti Malaya ini juga , Portugis dan Belanda hanya menguasai pelabuhan dan ibu negeri Melaka dan beberapa tempat strategik di kepulauan Melayu. Namun begitu, kekuasaan mereka tidak menembusi ke seluruh pelusuk tanah air dan kepulauan Melayu yang lain contohnya di Kedah, Kelantan, Pahang, Terengganu, Johor dan lain-lain. Amalan dan ajaran Islam masih lagi diamalkan dan terlestari daripada satu generasi kepada generasi seterusnya. Mungkin ini disumbangkan oleh kegiatan dan aktiviti dakwah oleh ilmuan dan ulamak Islam yang bertaburan di seluruh pelosok nusantara sebagai contohnya jaringan dakwah yang dijalankan oleh wali Songo di Pulau Jawa, Sumatera, Semenanjung Tanah Melayu dan kepulauan melayu lain, sehingga memungkinkan penghayatan Islam itu dapat terus bertahan.

Keteguhan pengamalan agama Islam ini terencat apabila British melalui dasar imperialism dan kolonialisme menguasai Tanah Melayu dan kepulauan Melayu yang lain. British atau Inggeris telah menguasai pentadbiran dan sosio-ekonomi negeri-negeri Melayu termasuklah memperkenalkan secara paksa pemakaian undang-undang Inggeris bagi mengurus pelaksanaan ekonomi dan sosio-politik mereka. Agama Islam hanya bersifat peribadi penduduk-penduduk yang terbatas dalam konteks kekeluargaan, perwarisan, wakaf, masjid, Baitul Mal dan di bawah kendalian pemerintah-pemerintah Melayu ketika itu. Undang-undang jenayah, komersial, pentadbiran dan undang-undang moden yang lain menggunakan undang-undang Inggeris. Dalam memaksa undang-undang Inggeris ini beberapa set undang-undang yang mengharuskan pemakaian undang-undang mereka ini telah dikuatkuasakan melalui First Charter of Justice, Second Charter of Justice dan Civil Law Ordinance and Enactment.

Apa yang malang menurut mantan penyandang Kursi Tun Abdul Ghaffar Baba UPSI ini, Inggeris hanya memerlukan 70 tahun untuk menguasai falsafah, kebudayaan dan pandangan alam (worldview/epistemology) orang Melayu. Kesannya dasar-dasar kolonialisme and imperialism Inggeris ini juga menjadikan orang Melayu lack of self confidence dan sedikit sebanyak melumpuhkan jatidiri dan semangat juang orang Melayu. Benarlah kata-kata Malek Bennabi:

“Colonialism is responsible for the dearth of the desirable means for developing his talents and material resources, but the unwillingness of the Muslim to utilize the available means, and to exert the required over-effort to raise his standard of life denotes colonisibility.” (Malek Bennabi, Islam in History and Society, 1987, Islamic Research Institute Publications, Islamabad, hlm. 54)

Sepatutnya tempoh malang 70 ini tidak boleh dijadikan alasan bagi orang-orang Melayu untuk bingkas bangun semula meneruskan kesinambungan kegemilangan bangsa Melayu yang telah terbukti kegagahannya sejak 2000 tahun lampau. Semangat juang dan jatidiri orang perlulah digemblengkan bagi memastikan kesinambungan undang-undang dan dasar-dasar Islam yang tidak harus tunduk dengan desakan-desakan yang bersifat peribadi, chauvinistic dan buta sejarah serta budaya yang boleh menjahanamkan kerangka dan penghayatan jasad dan roh Islam itu sendiri.

Ahli panel kedua forum – Dato’ Zainul Rijal Abu Bakar pula membahasakan isu-isu rumit yang timbul dalam beberapa kes undang-undang contohnya kes Nyonya Tahir dan Lina Joy. Kes-kes ini melibatkan isu murtad, isu pertentangan dan pertindihan bidang kuasa Mahkamah Shariah dan Mahkamah Sivil, isu ketidak-seragaman Undang-undang Kekeluargaan Islam, Tatacara Mal, Jenayah Islam dan pentadbiran undang-undang Islam di negeri-negeri di Malaysia. Presiden Persatuan Peguam Muslim Malaysia ini juga menyentuh mengenai deraf bil Hudud Kelantan dan Terengganu yang pada hematnya berlawanan dengan bidang kuasa Persekutuan dan negeri-negeri yang telah ditetapkan dalam Perlembagaan Persekutuan. Pada hemat beliau, bukan semua undang-undang Inggeris yang dilaksanakan pada masa kini berlawanan dengan undang-undang Islam. Terdapat banyak persamaan. Namun, terdapat beberapa peruntukan-peruntukan undang-undang Malaysia yang berlawanan dengan undang-undang Islam. Ini boleh diharmonikan dengan membuat beberapa penyesesuaian dalam kerangka undang-undang sedia ada, contohnya dalam kes pembunuhan, Islam mengenakan hukuman Qisas, tetapi dalam Kanun Kesiksaan sekiranya terbukti pesalah akan dikenakan hukuman bunuh. Namun, terdapat peruntukan di mana Yang Dipertuan Agong boleh memberi ampun ke atas pesalah. Bagi membolehkan undang-undang Islam dapat dilaksanakan Yang Dipertuan Agong boleh mendapatkan kebenaran waris orang yang dibunuh itu bagi mendapatkan maaf dan gantirugi boleh dikenakan ke atas pembunuh tadi.

Antara lain-lain isu yang disentuh oleh Pakar Rujuk Komuniti Shariah Jabatan Peguam Negara ini juga adalah isu yang berkaitan dengan hak asasi manusia, isu pengurusan dan perjawatan Jabatan Kehakiman Shariah dan Jabatan Kehakiman Shariah negeri-negeri, Enakmen Profesyen Peguam Sharie, Isu Kalimah Allah dan isu mengenai The Law Reform Marriage and Divorce Act 1976 melibatkan pasangan Islam.

Forum ini berakhir tepat jam 12.30 tengahari dan dihadiri oleh para pensyarah UUM, staf UUM dan pelajar undang-undang.

E-mail from aggrieved purchasers of an abandoned housing project at Selangor

I received an email from an aggrieved purchaser of an abandoned housing project.  The email reads as follows:

Catchwords:

abandoned housing project; company’s liquidation; liquidator; duties and responsibilities of liquidator; false architect certificate; false claims; unlicensed housing developer; bridging loan lender; charge; cause to the contrary; public interest; purchasers’ interests on charged lands; islamic banking; non-conversion of lands; conflict of  interests between the chargee and the purchasers.

Dear Encik Nuarrual,

I read about your areas of expertise and interest from your blog and am writing to appeal for your help to work with us towards achieving a settlement of our abandoned housing scheme.

I am a purchaser of a plot of bungalow land in an abandoned housing project called…, Selangor. I am also the Secretary of …. which comprises over 400 purchasers (and their families) from all five phases of our development.

From 2000 to 2003, over 600 purchasers bought plots of bungalow land from a developer called …., owned and managed by … and his family. In 2004, the developer abandoned the project. End financiers include Bank Rakyat Malaysia (Islamic Banking with, we believe, the largest number of borrowers,…), EON Bank (now HLBB), Ambank, Public Bank, Bank Negara.

The bridging financier, Hong Leong Bank Berhad (HLBB), obtained a Court Order to wind-up the company in 2007. They hold the charge to the developer’s lands (2 Master Titles under which our plots exist, and another 2 Master Titles which was for future development). Their nominated liquidator, A, was appointed by the High Court of Malaya. Since 2006 we have sought the aid of many institutions, in Federal and State Governments, and in the private sector but to no avail.

The developer applied for conversion and sub-division for three phases but did not apply for two phases (our development has five phases). As they did not pay the full premium, the plots in the 3 phases were not converted or sub-divided). The developer gave vacant possession to purchasers who paid 100% of the SPA in one phase and HLBB has given Letters of Disclaimer to many purchasers in the five phases (Bank borrowers and cash purchasers whose redemption sums they received). HLBB informed us that they did not receive the redemption sums for many plots which were purchased for cash.

About 30 members whose redemption sums were not passed to HLBB by the developer made police reports in 2009. We understand that an investigation was carried out by the police and that the police referred the case to the Attorney General’s Chambers. However, our checks with the AG’s Chambers have revealed that the AG’s Chambers have not received the investigation papers from the Royal Malaysian Police although requested by a DPP.

Since 2007, we have been communicating with HLBB and A but somehow both these institutions appear reluctant to find an amicable resolution to our issue. As such, we have been left to resort to our own devices to find a resolution because no one will help us. We decided that doing nothing was not an option for us.

We believe that the developers walked off with about RM50-60 million. In 4 phases, the developer billed purchasers 80% of the SPA price but on the ground, they probably only carried out 20-30% of the work. The banks released the loans, and cash purchasers paid too, based on the schedules of payment stipulated in the SPAs certified by the developer’s engineer.

In 2008, A attempted to sell the undeveloped and unsold lands to a RM2 company at RM1 per sq ft even though at the time we were all in discussion with the Lembaga Perumahan dan Hartanah Selangor on ways to solve the problem. These lands are an asset of the company, the sale proceeds of which could be utilised to rehabilitate our abandoned project. In order to protect our plots and attempt to stop the sale of the lands, about 50 of us placed caveats on the 2 Master Titles on which our plots sit.

In 2009 we learned from the Estate Land Board (ELB) that this development is unlawful in that the developer did not seek the ELB’s permission to convert Estate land into residential land. The Chair of the ELB refused the transfer of the lands and requested A, HLBB and our Group to agree a settlement. However, in August 2011 we were shocked to learn from A that the ELB had agreed to the transfer of the 2 Master Titles which contain the developer’s future phases because we had appealed to the ELB not to agree the transfer until our issue was settled. We strongly felt that if A and HLBB were successful in transferring the lands, they would not reach a settlement with us. The lands have since been transferred to the RM2 company.

A and HLBB told us that they would not work out a settlement. We responded that our Group would find a way out. Following a long period of negotiation, in July 2010, HLBB and our Group agreed that HLBB would sell to a white knight (WK) the unsold plots and the undeveloped lands for a total of about RM9.5million. The arrangement would also include giving the white knight the “rights” to the … scheme so that any unpaid balance would be payable by the existing purchasers to the white knight.

HLBB also agreed to waive the redemption sum paid by cash purchasers to the Developer but which was not passed to them as Chargee Bank. The amount of this was estimated at RM 9 million. In return for this purchase the white knight would be obliged to rehabilitate the existing 627 sold plots without any additional charge to the existing purchasers. In addition, the proposed new arrangements would be submitted for sanction by the High Court under Section 176 of the Companies Act 1965.

On that basis, we searched for a white knight. After many discussions with a number of WKs, and by the deadline of early September 2011 set by A, only one WK emerged. They submitted their proposal in accordance with the terms set out by HLBB. However, A informed us that they would have to forward the proposal to HLBB for consideration. Then all became silent. It was only after we appealed to Bank Negara and with their intervention, we understand, HLBB agreed (after 4 months) to accept the proposal.

This WK was introduced to us by Bank Rakyat (BR) as we have been keeping BR informed of all our efforts. We had expected BR to provide a loan to the WK to rehabilitate our project but they declined. Since then, the WK embarked on a search for investors, developers, financiers. Initially, these parties showed a lot of interest but at the last minute, they all declined. While the search was going on, the WK was in discussion with A and their lawyer on the terms and conditions of the sale and purchase of all the lands and our development, and the Scheme of Arrangement under S176.

HLBB set a final deadline for the signing of the SPA on 17 August 2012. Although this deadline was a result of 3 postponements, these postponements were not entirely due to our WK. The T&C of the SPA could not be agreed so postponements were required.

On 13 August, A set up a meeting with our Pro Tem Committee. At that meeting, A informed us that each purchaser in our Group has to pay them a verification fee of RM500 but our Group has to do all the work. Purchasers outside our Group would have to pay 2% of the SPA price.

We asked A why this meeting was held just 4 days before the signing of the SPA when, for many months, we wrote several letters to them asking for a meeting so we could discuss the issue and inform our members early. We felt under pressure as A’s demand did not give us time to negotiate nor consult our members. In fact, we think A expected us to agree as the Liquidator allocated 20 minutes only for this meeting. He left early and his colleagues continued because we refused to agree as we had queries.

After the meeting members who attended had questions and comments so we wrote to A the following day to ask them to put their request in writing (and to reply to our queries/comments as we envisaged other members asking the same questions) so that we could circulate to members for their views. However, we did not get a response. Our questions are still unanswered. Even if we wanted to cooperate, A has not told us the level of work it wants us to carry out nor whether we have to make any more additional payments.

We also do not have the answer to our question as to the source of law that stipulates we have to pay a verification fee. A has our files from the developer, a list of purchasers filed with the High Court, and conducted a Proof of Debt exercise in 2009. A is demanding our list of members and their contact details before they will give us the letter we requested for members. We are unable to understand this stance. Sometime in 2008 A said that they are Officers of the Court and threatened to obtain a Court Order to compel us to give them our list of members’ contact details. We declined.

On the deadline of 17 August, our WK did not sign the SPA because they were concerned that if purchasers did not pay the verification fee, they would not be admitted to vote for the Scheme of Arrangement. As a result, there would be no scheme and no deal. It is worthwhile mentioning here that A would get more than RM500,000 from purchasers and a substantial non-refundable amount of RM250,000 from the WK.

We have been meeting with the Jabatan Insolvency in Putrajaya over the issue of the liquidation process and the hardships it is causing all of us. However, Officers we have met say that they are unable to do much. Control lies with the Prime Minister, it seems, who has the power to issue and terminate Liquidators’ licences. The other option is the Court. It appears to us that there does not seem to be a written Code of Ethics for liquidators.

We understand that JIM has taken A to Court on this verification fee issue (it seems other liquidators are imposing the charge too) on behalf of purchasers in another scheme but we do not know if there is a decision. From our experience, the Heads of the relevant Departments in JIM do not stay long enough to make substantial changes or improvements to the system.

Despite the deadline, the WK and our Group have continued to look for parties to help us with the rehabilitation. HLBB and A were informed about this in writing. A few days ago, the WK secured a public listed company whose Main Board agreed, in principle, to take on the deal. Our happiness was short-lived.

HLBB was informed about this in writing and personally, but we were told to deal directly with A. A was also informed in writing but remained silent. A few days later, A wrote to our WK that A is at liberty to sell the unsold and undeveloped lands to any third party (without considering the rehabilitation) because our WK’s time has lapsed. If this happens, we can be sure that we will not be able to get our project out of the abandoned status. A may then take us through the liquidation process where we lose our plots and our money. During the Proof of Debt exercise all of us nominated to hold on to the beneficial interest in our plots and not exchange it for money. Through the years, we feel we have and are being bounced between A and HLBB.

Needless to say, most of us purchased our plots from the developer not only because we wanted to live in Batang Kali but also because we relied heavily on the good reputation and creditability of Hong Leong Bank Berhad as Bridging Financier, and Bank Rakyat and Ambank as the End Financiers. That we would not have any concerns about the development being completed. Alas, that is not the reality.

Most of our members are retirees who spent their savings to buy their plots, and still have no home. Some are young families who are repaying their bank loans but still have no home. Some have passed away and their children now attend our meetings. This episode has caused a lot of pain and suffering. The Court appointed Officer, A, does not appear to want to collaborate to arrive at a fair and just resolution for all parties.

We have invested six years of our lives in trying to obtain what is rightfully ours, and fairness and justice for all our members and their families. We have done all our own research and our own negotiations, and have persevered. However, success seems to elude us because we are not on a level playing field. We have tried to find an amicable solution, out of Court, because we know that A and HLBB have deep pockets which can keep us all in Court for many years. We have no real access to justice.

I hope you will consider our case and let me know if you are able to advise us on our options under the Malaysian legal system so that we can form an action plan to pursue our goal. If we are successful, we may be the first abandoned scheme that has depended totally on self-help. There is much to assimilate in all this, not surprisingly after a period of 6 years of the liquidation process. If you are interested to explore the … case a little further, I would be pleased to arrange a meeting between you and our Pro Tem Committee. We are aware that there are a large number of abandoned projects and perhaps this will inspire and motivate purchasers in other schemes.

Many thanks for reading my note. I look forward to hearing from you.

 Best wishes,

 ….

Perbankan Islam Diminta Lebih Berperikemanusiaan Terhadap Pembeli Rumah Terbengkalai

BERNAMA – Sunday, October 14, 2012

From: http://news.mylaunchpad.com.my/Local/BM/DalamNegeri/Article?Key=3baa5e5a-7e72-4ac4-acf9-b76c1458d384 (accessed 18 October, 2012)

Berita Terkini

KUALA LUMPUR, 14 Okt (Bernama) — Pihak Perbankan Islam di negara ini diminta untuk lebih berperikemanusiaan kepada pembeli rumah terbengkalai supaya tidak terbeban dengan hutang yang berisiko menjadi muflis.

Ketua Biro Pemantau Perkhidmatan Kewangan Persatuan Pengguna Islam Malaysia (PPIM) Sheikh Abdul Kareem Said Khadaied berkata pihaknya mendapati terdapat banyak kes pembeli menghadapi kes mahkamah yang difailkan pihak perbankan Islam itu bagi menuntut bayaran balik dengan kadar tinggi biarpun rumah tidak siap.

Beliau berkata demikian dalam Forum Pengguna 2012 bertajuk “Perbankan Islam Hanya Pada Nama?” di sini.

Aktivis PPIM Shirazdeen Adam Shah bertindak sebagai moderator forum itu manakala Ketua Bahagian Syariah Bank Islam Malaysia Berhad Ustaz Mohd Nadzri Chik sebagai panel kedua dan bekas Ketua Pegawai Eksekutif (CEO) Bank Muamalat Malaysia Bhd Datuk Abdul Manap Abdul Wahab menjadi panel keempat.

Sheikh Abdul Kareem yang juga panel ketiga forum itu berkata sebagai sebuah entiti yang berlandaskan syariah, pihak bank wajar memikirkan masalah yang dihadapi pengguna Islam yang mana pegawai-pegawai bank tersebut disaran menggunakan budi bicara dalam usaha membantu pembeli Islam meringankan beban mereka.

Sementara itu, panel pertama yang juga Pengarah Institut Kajian Tadbir dan Inovasi Universiti Utara Malaysia (UUM) Dr Nuarrual Hilal Md Dahlan berkata Bank Negara perlu memperbaiki sistem Perbankan Islam di seluruh negara supaya dapat memberi manfaat kepada rakyat terutama dalam hal tanggungan hutang akibat rumah terbengkalai.

Katanya, kerajaan juga perlu mewajibkan semua pemaju swasta menyiapkan rumah terlebih dahulu yang kemudiannya baru menjalankan operasi jualan termasuk memperkenal insurans jaminan kepada pembeli untuk menyelamatkan diri daripada dibelenggu isu itu.

Di samping itu, Dr Nuarrual Hilal juga menyarankan bakal pembeli rumah membuat pembelian daripada pemaju kerajaan bagi mengelakkan risiko muflis akibat menanggung hutang bank kerana projek perumahan terbengkalai.

Beliau berkata sekiranya golongan itu membeli rumah daripada kerajaan seperti Syarikat Perumahan Nasional Berhad (SPNB) ia lebih memberi jaminan dari aspek modal yang membolehkan rumah siap berdasarkan jadual ditetapkan.

Malaysia: Islamic Banks Urged To Be Sympathetic To House Buyers

From: http://islamic-finance-malaysia.blogspot.com/ (accessed 18 October, 2012)

KUALA LUMPUR: Islamic banking players have been urged to be sympathetic to house buyers of abandoned projects and not burden them with debt as it may lead to bankruptcy.

Malaysian Muslim Consumers Association (PPIM) financial services monitoring bureau chief, Sheikh Abdul Kareem Said Khadaied said many house buyers face legal action filed by Islamic banking players demanding high payment for uncompleted houses.

Sheikh Abdul Kareem, who was the third panel member, said as an Islamic entity, banks should think of problems faced by Muslim consumers and the officers should discretion to help the house buyers.

PPIM activist Shirazdeen Adam Shah served as forum moderator with Bank Islam Malaysia Bhd sharia division head, Ustaz Mohd Nadzri Chik as second panel member and Bank Muamalat Malaysia Bhd former chief executive officer, Datuk Abdul Manap Abdul Wahab as fourth panel member.

First panel member was Dr Nuarrual Hilal Md Dahlan, director of Institute for Governance and Innovation Study, Universiti Utara Malaysia (UUM).

Nurrual said Bank Negara should improve Islamic banking to benefit consumers, especially buyers of houses in abandoned projects.

The government should compel all private developers to complete the houses and sell them by including warranty insurance to avoid problems.

He also urged consumers to buy from government developers like Syarikat Perumahan Nasional Berhad (SPNB) to avoid the risk of bankruptcy.

(Borneo Post Online / 15 Oct 2012)

Perbankan Islam Diminta Lebih Berperikemanusiaan Terhadap Pembeli Rumah Terbengkalai

From http://www.rtm.gov.my/berita/index.php?option=com_content&view=article&id=2014%3Aperbankan-islam-diminta-lebih-berperikemanusiaan-terhadap-pembeli-rumah-terbengkalai&catid=35%3Anasional&Itemid=53&lang=bm (accessed 17 Oktober, 2012)

Kuala Lumpur – Pihak Perbankan Islam di negara ini diminta untuk lebih berperikemanusiaan kepada pembeli rumah terbengkalai supaya tidak terbeban dengan hutang yang berisiko menjadi muflis.

Ketua Biro Pemantau Perkhidmatan Kewangan Persatuan Pengguna Islam Malaysia (PPIM) Sheikh Abdul Kareem Said Khadaied berkata pihaknya mendapati terdapat banyak kes pembeli menghadapi kes mahkamah yang difailkan pihak perbankan Islam itu bagi menuntut bayaran balik dengan kadar tinggi biarpun rumah tidak siap.

Beliau berkata demikian dalam Forum Pengguna 2012 bertajuk “Perbankan Islam Hanya Pada Nama?” di sini.

Aktivis PPIM Shirazdeen Adam Shah bertindak sebagai moderator forum itu manakala Ketua Bahagian Syariah Bank Islam Malaysia Berhad Ustaz Mohd Nadzri Chik sebagai panel kedua dan bekas Ketua Pegawai Eksekutif (CEO) Bank Muamalat Malaysia Bhd Datuk Abdul Manap Abdul Wahab menjadi panel keempat.

Sheikh Abdul Kareem yang juga panel ketiga forum itu berkata sebagai sebuah entiti yang berlandaskan syariah, pihak bank wajar memikirkan masalah yang dihadapi pengguna Islam yang mana pegawai-pegawai bank tersebut disaran menggunakan budi bicara dalam usaha membantu pembeli Islam meringankan beban mereka.

Sementara itu, panel pertama yang juga Pengarah Institut Kajian Tadbir dan Inovasi Universiti Utara Malaysia (UUM) Dr Nuarrual Hilal Md Dahlan berkata Bank Negara perlu memperbaiki sistem Perbankan Islam di seluruh negara supaya dapat memberi manfaat kepada rakyat terutama dalam hal tanggungan hutang akibat rumah terbengkalai.

Help Buyers of Abandoned Housing Projects: PPIM

From: http://www.propertyguru.com.my/property-news/2012/10/6326/help-buyers-of-abandoned-housing-projects-ppim (accessed 17 October, 2012)

Instead of loading buyers of abandoned housing projects with debt that may lead to bankruptcy, Islamic banks should be sympathetic to them, said Sheikh Abdul Kareem Said Khadaied, Financial Services Monitoring Bureau Chief at Malaysian Muslim Consumers Association (PPIM).

According to media reports, Sheikh Abdul Kareem noted that many homebuyers are facing legal cases filed by Islamic banks demanding high payment for uncompleted homes.

“For example, a house buyer was ordered by the court to pay back the full price of the house costing RM492,000 to a bank although the bank only paid RM39,000 to the developer,” he said at the Consumer Forum 2012 entitled ‘Is Islamic Banking Only In Name?’

Nuarrual Hilal Md Dahlan, Director of Institute for Governance and Innovation Study at Universiti Utara Malaysia served as the first panel member, while Ustaz Mohd Nadzri Chik, Sharia Division Head at Bank Islam Malaysia Bhd, acted as the second panel member.

Meanwhile, PPIM Activist Shirazdeen Adam Shah served as the forum moderator and Datuk Abdul Manap Abdul Wahab, Former Chief Executive Officer at Bank Muamalat Malaysia Bhd was the fourth panel member.

Nurrual said that Bank Negara Malaysia should enhance Islamic banking to benefit consumers, particularly buyers of abandoned housing projects. Moreover, the government should require all developers to complete their projects.

To avoid the risk of bankruptcy, he also urged consumers to buy only from government developers such as Syarikat Perumahan Nasional Berhad (SPNB).

‘Be Sympathetic To House Buyers Of Abandoned Projects’

From: http://www.nst.com.my/latest/be-sympathetic-to-house-buyers-of-abandoned-projects-1.156728# (Accessed 14 October, 2012)

KUALA LUMPUR – Islamic banking players have been urged to be sympathetic to house buyers of abandoned projects and not burden them with debt as it may lead to bankruptcy.

Malaysian Muslim Consumers Association (PPIM) financial services monitoring bureau chief, Sheikh Abdul Kareem Said Khadaied said many house buyers face legal action filed by Islamic banking players demanding high payment for uncompleted houses. “For example, a house buyer was ordered by the court to pay back the full price of the house costing RM492,000 to a bank although the bank only paid RM39,000 to the developer,” he said at Consumer Forum 2012 entitled “Is Islamic Banking Only In Name? here.

Sheikh Abdul Kareem who was the third panel member said as an Islamic entity, banks should think of problems faced by Muslim consumers and the officers should discretion to help the house buyers.

PPIM activist Shirazdeen Adam Shah served as forum moderator with Bank Islam Malaysia Bhd sharia division head, Ustaz Mohd Nadzri Chik as second panel member and Bank Muamalat Malaysia Bhd former chief executive officer, Datuk Abdul Manap Abdul Wahab as fourth panel member.

First panel member was Dr Nuarrual Hilal Md Dahlan, director of Institute for Governance and Innovation Study, Universiti Utara Malaysia (UUM).

Nurrual said Bank Negara should improve Islamic banking to benefit consumers, especially buyers of houses in abandoned projects.

The government should compel all private developers to complete the houses and sell them by including warranty insurance to avoid problems.

He also urged consumers to buy from government developers like Syarikat Perumahan Nasional Berhad (SPNB) to avoid the risk of bankruptcy. — BERNAMA

Perbankan Islam Diminta Lebih Berperikemanusiaan

From: http://www.sinarharian.com.my/nasional/perbankan-islam-diminta-lebih-berperikemanusiaan-1.94520 (accessed 14 October, 2012)

 14 Oktober 2012

KUALA LUMPUR – Pihak Perbankan Islam di negara ini diminta untuk lebih berperikemanusiaan kepada pembeli rumah terbengkalai supaya tidak terbeban dengan hutang yang berisiko menjadi muflis.

Ketua Biro Pemantau Perkhidmatan Kewangan Persatuan Pengguna Islam Malaysia (PPIM) Sheikh Abdul Kareem Said Khadaied berkata pihaknya mendapati terdapat banyak kes pembeli menghadapi kes mahkamah yang difailkan pihak perbankan Islam itu bagi menuntut bayaran balik dengan kadar tinggi biarpun rumah tidak siap.

Beliau berkata demikian dalam Forum Pengguna 2012 bertajuk “Perbankan Islam Hanya Pada Nama?” di sini.

Aktivis PPIM Shirazdeen Adam Shah bertindak sebagai moderator forum itu manakala Ketua Bahagian Syariah Bank Islam Malaysia Berhad Ustaz Mohd Nadzri Chik sebagai panel kedua dan bekas Ketua Pegawai Eksekutif (CEO) Bank Muamalat Malaysia Bhd Datuk Abdul Manap Abdul Wahab menjadi panel keempat.

Sheikh Abdul Kareem yang juga panel ketiga forum itu berkata sebagai sebuah entiti yang berlandaskan syariah, pihak bank wajar memikirkan masalah yang dihadapi pengguna Islam yang mana pegawai-pegawai bank tersebut disaran menggunakan budi bicara dalam usaha membantu pembeli Islam meringankan beban mereka.

Sementara itu, panel pertama yang juga Pengarah Institut Kajian Tadbir dan Inovasi Universiti Utara Malaysia (UUM) Dr Nuarrual Hilal Md Dahlan berkata Bank Negara perlu memperbaiki sistem Perbankan Islam di seluruh negara supaya dapat memberi manfaat kepada rakyat terutama dalam hal tanggungan hutang akibat rumah terbengkalai.

Katanya, kerajaan juga perlu mewajibkan semua pemaju swasta menyiapkan rumah terlebih dahulu yang kemudiannya baru menjalankan operasi jualan termasuk memperkenal insurans jaminan kepada pembeli untuk menyelamatkan diri daripada dibelenggu isu itu.

Di samping itu, Dr Nuarrual Hilal juga menyarankan bakal pembeli rumah membuat pembelian daripada pemaju kerajaan bagi mengelakkan risiko muflis akibat menanggung hutang bank kerana projek perumahan terbengkalai.

Beliau berkata sekiranya golongan itu membeli rumah daripada kerajaan seperti Syarikat Perumahan Nasional Berhad (SPNB) ia lebih memberi jaminan dari aspek modal yang membolehkan rumah siap berdasarkan jadual ditetapkan. – Bernama

CALL FOR BOOK CHAPTERS CONTRIBUTIONS

CALL FOR BOOK CHAPTERS CONTRIBUTIONS

INSTITUTE FOR GOVERNANCE AND INNOVATION STUDIES (IGIS)

COLLEGE OF LAW, GOVERNMENT AND INTERNATIONAL STUDIES

Book Title: “GOVERNANCE”: CONTEMPORARY ISSUES AND PROSPECTS

The Institute for Governance and Innovations Studies (IGIS) of the College of Law, Government and International Studies (COLGIS), intends to produce a book chapters to be titled: “GOVERNANCE”: CONTEMPORARY ISSUES AND PROSPECTS. To realize this plan, IGIS invites all academics and interested persons to contribute original manuscripts for consideration of publication in the above book chapters.

Writings concerning governance are an interdisciplinary field that takes place across a range of discipline such as law, accounting, economics, history, international relations, development, sociology, geography, education, Islamic Banking/finance and conventional banking/finance.

Our intention in this book is to identify and map broader governance dimensions of research and academic contributions that bear on the pursuit of governance theoretical and practical aspects that can guide current and future efforts in pursuing good governance and maintaining it. The collection of papers may also chart future directions of governance management and administration. The authors should come from variety of fields such as, but not limited to law, accounting, economics, history, international relations, development, sociology, geography, education and finance. The book chapters will address theoretical and practical questions on governance or its practices including the issues, challenges and its prospects. Any recognised methodology is acceptable, provided that the data and finding must be original and have been adequately analysed and able to meaningfully contribute to the discussion and development of the topic under study. The manuscript shall not have been previously published or under any review for publications elsewhere. All manuscripts received shall be subject to blind reviews. Only manuscripts which have been blind reviewed and duly corrected will be published in the said book.

Format:

1) Use microsoft words

2) All manuscripts must be prepared in English (UK)

3) The length of the manuscript shall not more than 10,000 words

4) 1.5 margin spacing

5) Use footnote with Turabian style

6) Provide references in Turabian style

7) Use 12 font size

8) Use Times New Roman font

If you are interested in contributing a book chapter to this publication, please send the full manuscript together with your name, affiliation and its address, email address, abstract of not more than 300 words, 5 keywords and references to igil@uum.edu.my

Thank you

Dr. Nuarrual Hilal Md. Dahlan, ACIS

Institute for Governance and Innovations Studies (IGIS)

College of Law, Government and International Studies

Universiti Utara Malaysia

ISSUES OF KHIYAR IN CONTRACT: A CASE STUDY OF THE HOUSING STATUTORY STANDARD SALE AND PURCHASE AGREEMENTS IN THE HOUSING DEVELOPMENT (CONTROL AND LICENSING) REGULATION 1989 IN PENINSULAR MALAYSIA

…

INTRODUCTION

It is well entrenched that the application of the statutory standard formatted sale and purchase agreements (Schedules G, H, I and J (hereinafter referred as ‘the said agreements’)) as provided in the Housing Development (Control and Licensing) Regulations 1989 (‘Act 118’), is mandatory for all house purchases in Peninsular Malaysia pursuant to regulations 11(1) and 11(1A) of the Housing Development (Control and Licensing) Regulations 1989 and the principles decided in Rasiah Munusamy v. Lim Tan & Sons Sdn. Bhd [1985] 2 MLJ 291, Sea Housing Corporation Sdn. Bhd v. Lee Poh Choo [1982] 2 MLJ 31 (FC), Kimlin Housing Development Sdn. Bhd. (Appointed Receiver and Manager) (In Liquidation) v. Bank Bumiputra (M) Bhd. & Ors [1997] 2 MLJ 805 (FC) and MK Retnam Holdings Sdn. Bhd v. Bhagat Singh [1985] 2 MLJ 212.

Parliament enacted the Housing Developers (Control and Licensing) Act 1966 (Act 118) for the purpose of protecting the rights of the purchasers. In Khau Daw Yau v. Kin Nam Realty Development Sdn. Bhd. [1983] 1 MLJ 335, HC, VC George J, at page 341, said:

‘The scheme of the Housing Developers (Control and Licensing) Act 1966, and the Rules of 1970 is to provide a measure of protection to purchasers of housing accommodation in a housing development against unscrupulous developers’.

…

1) Whether the said agreements contain khiyar terms?

2) Whether the said agreements comply with Islamic Law insofar as khiyar term is concerned?

3) If there is a khiyar term, whether the term is sufficient to protect the purchasers’ rights in abandoned housing projects?

4) If there is no khiyar term in the said agreements, how to formulate a khiyar term that can provide certain protection to the purchasers against the problems of abandoned housing projects?

…

KHIYAR

Khiyar means a right of the parties to the contract to choose either to proceed with the contract or to void it due to defect found in the subject matter or the subject matter does not comply with the specifications and terms of the contract.

The authority for khiyar is the hadith of the Prophet Muhammad (Peach Be Upon Him) who said: ‘whenever you enter into contract, say to the other party that there shall be no fraud, and I reserve my right of khiyar in three days’. The purpose of the right of khiyar is to protect the interests of both parties to the contract against fraud (ghabn) or risk (gharar).

There are various types of khiyar according to the Muslim jurists. For example, according to the Hanafi school, there are seventeen types, according to the Maliki school there are two, while the Shafiee’ school opines there are sixteen.

…

Khiyar al-Shart

…

Khiyar al-’Ayb

…

Khiyar al-Wasf

…

Khiyar al-Ru’yah

…

Whether The Said Agreements Contain Terms of Khiyar?

There is no term for a right of khiyar (a right to nullify the said agreements and request for the return of the money paid and costs (indemnity and restitution)), especially khiyar al-’ayb, in the said agreements.

Similarly, there is no term and condition in the said agreements allowing purchasers to exercise inspection and examination of the completed units to ascertain its fitness and compliance with the terms and conditions of the sale and purchase agreement and the law, before the taking of vacant possession of the purported housing units.

Be that as it may, there are terms and conditions in the said agreements, in regard to the undertaking and covenant by the vendor developer to rectify any defective work, pay corresponding reduction in the purchase price or damages, and to pay late delivery damages. These obligations are provided in:

1) Clause 13 for Schedules G, H, I and J in respect of ‘materials and workmanship to conform to description’;

2) Clause 22 (Schedule G), clause 25 (Schedule H), clause 22 (Schedule I) and clause 25 in respect of ‘Time for delivery of vacant possession’; and,

3) Clause 25 (Schedule G), clause 29 (Schedule H), clause 25 (Schedule I) and clause 29 (Schedule J) in respect of ‘Defect liability period’.

Thus, to a certain degree, it is submitted that, with the above terms, the said agreements have generally complied with Islamic Law, to the effect of protecting the rights of purchasers, despite the absence of khiyar.

Notwithstanding the above, the right of khiyar is guaranteed under Islamic Law given to the contracting parties. This is based on a Hadith of the Prophet (PBUH), reported by Habban bin Munqidh and for avoiding possible commission of gharar. Thus, in this respect, it is opined that the said agreements have not complied with the requirement of the Hadith, for there is an absence of the term of khiyar, especially in the event the project undertaken is abandoned and on the occurrence of other exorbitant risks/fraud (gharar al-fahish) to the housing units purchased by the buyers. This is in line with the Hadith of the Prophet (PBUH) — ‘Those who act not in accordance with our requirement, the act is rejected and those who invent a new thing into our religion, he too is rejected’.

It may be argued that, it is allowed not to provide terms for a right of khiyar in the sale and purchase agreement, so long as there is no possibility for the commission of gharar, thus warranting the legality of the said agreements, according to Islamic Law. In abandoned housing projects and other consequential exorbitant losses, emanating from housing abandonment or otherwise, suffered by purchasers in housing transactions there is actual occurrence of gharar and the gharar is exorbitant (gharar al-fahish), resulting in the said agreements being void on part of the government and the vendor developer, as there is no provision for protection against the occurrence of abandonment and the ensuing grievances. In addition, even if there were terms of khiyar incorporated into the said agreements, despite the existence of a compensatory clause for any defective work becoming apparent within 18 months or 24 months, as the case may be, of the delivery of the vacant possession, these rights are of no use on the ground that the purchasers might not be able to get back the purchase monies paid or the developers fail to carry out the necessary rehabilitation as they have no monetary provision and might have run away escaping from further liability.

Further it is opined, liquidated damages and repairing of the completed building are only applicable if there is only immaterial/minor risk or fraud or defect (gharar al-yasir), not warranting the invocation of the right to exercise khiyar and that the purchasers agree to proceed with the contract, such as the failure of the vendor developer to complete the house on time as promised i.e delay in delivering the vacant possession on the date as promised or certain minor defective substandard works due to poor workmanships undertaken by the developers.

As submitted by the author earlier on, there are certain quarters arguing that the absence of khiyar will not vitiate the legality of the said agreements on the ground of maslahah al-mursalah, istihsan and ‘urf, even though pursuant to the primary legal texts (Quran and Sunnah), the said agreements are considered to be void. The author would like to emphasize that the applications of maslahah al-mursalah, istihsan and ‘urf are only applicable when there is hardship (darurah) to the people and the applications are only ad-hoc and temporary, not permanent. To allow these modes (maslahah al-mursalah, istihsan and ‘urf) of Islamic jurisprudence is to undo the full application and enforcement of the primary legal texts on khiyar and this may warrant the failure to comply fully with the requirements of the primary legal texts (Quran and Sunnah) and cause lackadaisical attitude among the people to comply, seriously, the original shariah legal requirements. This will not be the intention of the Shariah.

The author does not see any hardship if various khiyar were to be incorporated into the said agreements. On the other hand, this term (khiyar) will augment and beautify the said agreements and will achieve social justice and equity (including preserving the rights of the public purchasers against any housing catastrophes such as abandoned housing projects, its consequential losses, serious poor workmanship and other exorbitant risks and defects in housing buildings and other housing woes). In the wider sense adequate terms capable of protecting the rights of consumer purchasers, will increase the public confidence in the legal system, housing law, housing industry in Malaysia and the machinery of the Government. Further, the vendor developer on the other hand will become more responsible by the existence of khiyar terms in the said agreements (for example, to be careful not to abandon the projects and comply fully with the terms and conditions in the said agreements). This suggestion also complies with the mode of sadd al-zara’ in Islamic jurisprudence to prevent the occurrences of gharar (risk), ghabn (fraud) and other losses to purchasers.

It is opined the following should be considered for amending the said agreements in order to be in line with the requirements of Islamic Law, insofar as the right of khiyar is concerned:

1) A right of khiyar arises when the project falls under the definition of abandoned housing unit. It is opined, when housing project is abandoned, exorbitant defect or gharar al-fahish occurs. Right of khiyar should be given to the purchasers (i.e get back all the moneys paid and compensation for losses suffered—restitution and indemnity);

2) However, the right of khiyar does not arise if the delivery of the houses is delayed and it does not fall under the definition of abandoned housing unit or the losses and damage to the purchasers are insignificant, being only gharar al-yasir. In this respect, the purchasers are only entitled to late delivery damages (as statutory or equitable compensation). This is because the delay to deliver the houses is only a light/slight defect (al-yasir);

3) Abandoned housing unit is an exorbitant defect, thus, purchasers of abandoned housing projects have two (2) choices: a) right of khiyar (cancellation of the contract, entitle to refund of all the moneys paid and compensation from the developer for the losses or injuries suffered); or, b) proceed with the contract, provided the housing development insurance, which is imposed on all housing developers can be used to finance the cost of rehabilitation of the abandoned units until their duly completion;

4) In the case of defective workmanship or defect houses in the houses occupied by purchasers found and discovered during the defect liability period, if the defective workmanship or defective house is fahish (exorbitant), the purchasers also have two (2) choices: a) can claim khiyar; or, b) proceed with the contract provided the developer uses housing development insurance to repair the exorbitant defect – defective workmanship or defective house (al-fahish).

In the author’s view, in consequence of the possibility of invocation of the right of khiyar by the aggrieved purchasers above, the vendor developers may guard themselves against the losses caused by the cancellation of the contract with the insurance coverage that they might have held. Likewise, if the purchaser holds insurance against any defective works and losses emanating from the housing transaction, the insurance can cover the losses that he suffers. Possession of insurance is allowed under Islamic law provided this is done based on mutual trade and commerce and be free from unlawful transaction such as riba, corruption, maysir, gharar and from unlawful substances for example wine, blood etc.

Case law

There is a case law relating to the abandoned housing project. In this case, the court allowed the application of the aggrieved purchaser to nullify the agreement entered into with the vendor developer when the project carried out by the vendor developer was abandoned. This case is Diong Tieow Hong & Anor v Amalan Tepat Sdn Bhd [2008] 3 MLJ 411 (High Court at Kuala Lumpur). In this case, the court held that, the aggrieved purchasers to an abandoned housing project is entitled to a recession of the sale and purchase agreement with the defaulting abandoned developer as the developer had abandoned the project. Secondly, the purchasers also are entitled to get late delivery damages calculated from the promised date of delivery of vacant possession until the date of the recession of the agreement. The purchasers also succeeded in obtaining the return of all payment they made to the developer. However, the purchaser in abandoned housing project must serve notice of termination on the defaulting abandoned developer and the land proprietor in a joint venture housing project to entitle him to compensation even though the blame and fault were well proven fell on the vendor’s shoulder. This is illustrated in Zulkepli bin Mohamad Zain & Ors v BCM Development Sdn. Bhd. [2010] MLJU 1165 (High Court of Malaya at Johor Bahru). In this case, a purchaser to an abandoned housing project failed to serve notice of termination of the agreement on the developer and the proprietor of the land (if there was a joint venture). The court held that, if any of these parties (the developer and the proprietor) is not served with the notice of termination, the purported termination will not be recognized under the law. This is because serving of notice on one party alone renders the notice defective and incompetent pursuant to sections 6(a), 67 and 77 of the Contracts Act 1960. Following this failure, the purchaser is not entitled to any compensation and damages from the defaulting abandoned housing developer, even though the developer had breached the terms and conditions of the agreements, by abandoning the project.

Thus, bearing on the above case law, it is a high time and appropriate for the government to incorporate right of khiyar into the said agreements, in case the project undertaken by the vendor is abandoned. This is to protect the inherent right of the purchasers in abandoned housing and the purchaser would not to be burdened with the technical legal requirement as seen in Zulkepli bin Mohamad Zain.

RECENT DEVELOPMENT ON MEASURES TO DEAL WITH ABANDONED HOUSING PROJECTS

Recently the Malaysian government has announced certain measures to deal with the problems of abandoned housing projects. This includes the proposed amendments to Act 118. The proposed amendment is this–any housing developers who have abandoned their abandoned housing projects will be subject to a criminal penalty. This will come into effect with the enforcement of the new amendment to Act 118 that all licensed housing developers who failed to complete a housing project or have caused the abandonment of the project shall be deemed to have committed a criminal offence. Upon conviction, such a developer is liable to a fine of not less than RM250,000.00 and not more than RM500,000.00 or to be jailed up to three years, or both. This is provided under a new section in Clause 9 of the Housing Development (Control and Licensing) (Amendment) Bill 2011. Apart from that, Clause 5 of the bill, which is aimed at replacing Section 8A of Act 118, will also give the buyer the rights to terminate the sale and purchase agreement if the developer refused to continue implementing the project after six months from the date of the agreement. Furthermore Clause 3 of the Bill, which is aimed at amending Section 6 of Act 118, states that the deposit to obtain housing development licence to be increased from RM200,000 to three per cent of the estimated cost of the project. This is to ensure that only developers who have sufficient financial ability will be allowed to implement housing projects. Clause 8 of the Bill, which is aimed at amending section 16AD of Act 118 to increase the minimum penalty of RM10,000.00 for non-compliance of tribunal award to a maximum of RM50,000.00. On the other hand, clause 6 is aimed at amending sub-section 16N (1) of Act 118 to give more power for the tribunal to hear claims on a sale and purchase agreement involving unlicensed housing developer. The proposed clause 10, however, aimed at amending section 24 of Act 118 to increase the maximum fines for any violations of the law to RM50,000.00 from RM20,000 previously.

The author commends the above move by the government. However, the above approach in making the abandoned housing developers criminals only serve as a penal measures and not preventive. The best method to arrest the occurrences of abandoned housing projects in Malaysia is by way of introducing the full build then sell concept of housing delivery. The above penal provisions may not be effectual if the enforcement and implementation of the law is weak due to insufficient professional staff, inadequate administrative logistics, insufficient legal and technical knowledge of the staff and inefficient administration of the housing regulatory bodies. Thus, the problems of abandoned housing projects still cannot be totally eliminated.

In another new development involving abandoned housing projects are the initiatives adopted by PEMUDAH. According to PEMUDAH, in order to deal with the problems of abandoned housing project, government should adopt Build-Then-Sell Concept (BTS) in the Malaysian housing industry. Nonetheless BTS has not been defined by PEMUDAH. However, the question is whether this BTS is a “full build then sell” or a “quasi build then sell” concept? If it is a “full build then sell”, i.e the developer is required to duly complete the construction of the houses and only upon the receipt of CF or CCC, will the developer sell the houses, then this proposed BTS is the most appropriate measures to deal with the problems of abandoned housing projects. This method will totally eliminate the problems of abandoned housing projects. On the other hand, if BTS means a “quasi build then sell”, or a “10-90 concept”, i.e the purchaser only needs to pay 10% of the purchase price on the signing of the sale and purchase agreement and the 90% purchase price will only be paid to the developer on the duly completion of the houses, the author is still doubtful and skeptical as to whether this concept can eliminate the occurrences of abandoned housing projects altogether? This is because there is no guarantee that during the course of development using this concept (quasi build then sell or 10-90 concept), the developer will not abandon the project.

PEMUDAH also proposed Home Completion Insurance or Guarantee Scheme to face the problems of abandoned housing projects. In the opinion of the author this is a very good suggestion as this means can settle the problem of insufficiency of fund on part of the defaulting developer and facilitate the rehabilitation by white knights. Nonetheless the details of this proposal are yet to be worked out. It is hopeful that this proposal and its details can be workable and sufficient to deal with the problems of abandoned housing projects satisfactorily.

PEMUDAH in their final proposal also proposed that the schedule of payment for the respective agreements (Schedules G, H, I and J) should be amended. The proposal also aims to ensure that the title and the vacant possession can be made simultaneously.

Other initiatives as proposed by PEMUDAH in order to curb the occurrences of abandoned housing projects are as follows:

1) Proposed the government to apply Build-Then-Sell (BTS) Concept by licensed developers which to be fully implemented by 2015 with the house buyer shariah compliance financing scheme; and

2) Proposed to the government that certain amendment to the of Housing Development (Control and Licensing) Act 1966 (Act 118) be made which included:

• Increase in deposit from RM200,000 to three per cent of total estimated physical development cost which also includes professional fees for the Housing Development Account (HDA);

• House buyers having the option to cancel their Sale and Purchase Agreement (SPA) in the event that the project does not take place within six months of the agreement being signed;

• Extending the House Buyers’ Claims Tribunal (TTPR) scope to enable house buyers to claim damages from unlicensed housing projects;

• Imposing a maximum penalty of RM50,000 from RM20,000 for any offence made by developers to any provision under the Act 118;

• Prosecute developers responsible for abandoned housing projects; and

• Definition of “Housing Developer” has been expanded to include Liquidators where their role is to revive abandoned projects should the developer companies go for liquidation.

The government is also planning to conduct a study to unravel the problems faced by the aggrieved purchasers who are victims in abandoned housing projects. According to the Housing and Local Government Minister, Datuk Seri Chor Chee Heung “A special committee will be formed to look into this issue and to find ways to assist them.” At present, he said, buyers who took housing loans from the government would have their loans cancelled if they became victims of abandoned projects. “They will be considered for another housing loan, or have their four per cent interest rate deferred,” he added.

Further the Minister said, MHLG has taken several initiatives to assist victims of abandoned housing projects. He said the initiatives included providing a verification letter to funding institutions that the projects have been abandoned and assist buyers to discuss how their loans could be resumed after rehabilitation works started. “Such loans would be subjected to the funding institution’s valuation and based on the merits of each case but if the buyer is not assisted, a complaint can be lodged with the ministry which would be referred to Bank Negara Malaysia (BNM)”, the Minister explained. Chor said MHLG has also proposed for a working paper to be presented to the National Economic Council in order for BNM to recommend ways to assist the victims of such projects if the funding institutions fail to give them due consideration. He added that the government and related parties in the industry were discussing holistic ways to best implement the build and sell system.

It is submitted that the proposal that the house buyer be given a right to cancel their sale and purchase agreement (SPA) if his housing project does not take place within 6 months of the agreement being signed if a good move and serve as a khiyar right to them. However, the requirement that this proposal is restricted to a period within 6 months of the agreement being signed is quite inappropriate. There are many housing projects which have become abandoned after 6 months of the signing of the sale and purchase agreement. In this situation (after 6 month of the signing the sale and purchase agreement), the purchaser has no right to cancel the agreement. Thus, this is unfair to the purchasers.

Secondly, none in the above proposals and initiatives mentioning about the need to amend the said agreements in order to render them becoming shariah compliant products, particularly involving the issue of khiyar and proposal for its incorporation into the said agreements and thus can provide better protection to purchasers in abandoned housing projects. Thus, this paper is timely and the author hopes that this writing will further enhance and enrich the existing government and PEMUDAH’s proposed measures and initiatives to tackle the problems of abandoned housing projects and its consequences in particular on the importance of improving the said agreements, including incorporating term of khiyar.

RECOMMENDATIONS AND CONCLUSION

To give better protection to the purchasers, the said agreements should incorporate khiyar terms (option) and damages (liquidated and un-liquidated) due to the abandonment of the housing unit and on the occurrences of exorbitant defective works. The khiyar is a composite of khiyar al-syart, khiyar al-ayb, khiyar al-rukyah and khiyar al-wasf. This khiyar (option) can specifically be invoked on the occurrences of these events i.e when the housing units purchased are abandoned, i.e falls under the definition of “abandoned housing unit” as defined by the Act 118. and the defective works are exorbitant. In respect of other minor defective works, the right of khiyar, it is proposed, would not be given. This is because these minor defective or substandard works done by the vendor developer and the losses of the purchasers should be covered and remedied by the housing developer’s housing development insurance coverage. For this matter to be applicable, Act 118 should be amended by imposing on the applicant housing developers to possess housing development insurance before housing developer’s licence can be granted to them.

The author proposes the statutory definition of “abandoned housing project” be incorporated into Act 118. It is suggested that the following statutory definition of “abandoned housing unit” to be inserted into section 3 of Act 118 are as follows:

Addition to section 3, of Act 118:

‘Abandoned Housing Unit’ means any housing development unit where the developer fails to complete it within one year after the request notice to complete has been served by the Controller to the said developer or in respect of the incapable developer, after the expiry of the period within which a developer shall have to complete the construction of the unit either in 24 or 36 months, as the case may be, in accordance with regulations made controlling the rehabilitation of abandoned housing projects.’

‘Incapable Developer’ means any developer who is in the opinion of the Controller, on whatever reasons, is not able to duly complete or carry out the construction of the purported housing unit during the period within which a developer shall have to complete the construction of the unit either in 24 or 36 months, as the case may be.’

For the purpose of rehabilitating abandoned housing projects, it is proposed that once a problematic housing unit falls under the statutory definition of “abandoned housing unit”, the Minister of Housing and Local Government should order that such a unit be rehabilitated immediately.

From the above suggestions, the following term is proposed to be incorporated in the said agreements respecting the right of khiyar (option) and damages (liquidated and un-liquidated) due to the abandonment and exorbitant defective works. It is proposed new clauses 22B (1) for Schedules G, clause 25B (1) for Schedules H), clause 26B (1) for Schedule I, clause 25B(1) of Schedule J be introduced to incorporate term of khiyar (option), viz:

‘In the event the construction of the said property/building is terminated or abandoned and falls under the definition of ‘abandoned housing unit’ defined under Act 118 and the occurrence of exorbitant defective works, the purchaser shall have a right of option to rescind the agreement with the vendor and entitled to recover back all moneys paid and liquidated and un-liquidated damages for the damage and losses suffered and costs incurred due to the abandonment and exorbitant defective works from the vendor’

By incorporating the above khiyar term in the said agreements, it is the author’s view that the said agreements will be more protective to purchasers in the event of abandonment of their housing projects and on the occurrences of exorbitant defective works.