Daily Archives: November 30, 2008

Article from New Sunday Times, 30 November, 2008: ‘Rights for House Buyers’

A ROOF over the head, a shirt on the back, food on the table and access to healthcare and education are among the basic needs of a citizen that a government is responsible for, and these needs have generally been taken care of all these years.


In the case of the roof over your head, the government has since the 1970s been actively working together with the private sector to promote home ownership. Since that time, government efforts have been sullied by some housing developers and it is not just the occasional lapses. The national House Buyers Association has a list of complaints made to it, ranging from non-issuance of strata titles, poor management and maintenance, shoddy workmanship and, perhaps worst of all, abandonment of housing projects. In 2006, of the 245 projects involving 38,744 house buyers, 30 per cent of the complaints involved non-issuance of strata titles, 24 per cent were on management and maintenance, and 14 per cent on abandoned projects.


Abandoned projects are emotionally and financially draining; financially because not only has he to repay the bank for the money it has released to the irresponsible developer on the poor owner’s behalf, but also the rent and other costs of his present accommodation. According to the Ministry of Housing and Local Government, a total of 261 housing projects, involving 88,410 houses and flats, were abandoned between 1990 and 2005, with the properties valued at over RM8 billion. Universiti Utara Malaysia don Nuarrual Hilal Md Dahlan says the figures would be higher if they include some of the abandoned projects not listed in the ministry’s list or those where the project files have been closed. The ministry also does not take into account projects undertaken by independent contractors, cooperatives and others who are not under the purview of the Housing Development Act, and the housing projects abandoned in Sabah and Sarawak.


Downright embezzlement of progress payment collections, disputes among shareholders and problems involving contractors and disagreements with landowners were among the reasons for the projects being abandoned. The build-and-sell concept, as practised in New South Wales in Australia and Singapore, could be the solution but while the government decides on this, it could in the meantime listen to some of the suggestions of the people who matter. The House Buyers Association wants a “bill of rights for home owners”. This reflects the genuine concern of home owners, often borne by hard experience. They will be listing their woes this Saturday. The government should listen.



Taman Lestari Permai, Mukim Dengkil, Daerah Sepang, Selangor Darul Ehsan

The above housing project is located at Seri Kembangan, Serdang, Selangor, adjacent to the highway leading to Putrajaya. This housing project lies exactly opposite  Gate 2 Putrajaya. The construction of this project involved several phases of development. These phases are Phase 1A (238 housing units), Phase 1B (150 units), Phase 1C (68 units) and Phase 2 (133 units). The percentages of completion of each of these phases as at November, 2007 are 86% (for Phase 1A), 80% (for Phase 1B), 70% (for Phase 1C) and 90% for Phase 2.


Lestari Permai was lauched in the early 2004. This project should have been completed in 2 years after the date of the sale and purchase agreement executed, viz it should be duly occupied by early 2006. The main reason for the abandonment of this project was the financial problems faced by the developer–Europlus Construction Sdn Bhd, being a subsidiary for Kumpulan Talam Corporation Berhad (‘Talam’). The holding company–Talam too faced financial difficulties as they failed to balance the cash out flow and the cash in flow of their housing ventures, as the result of the repayment obligations they have to make to their financiers for an investment of a land of 11,878 acres, overdraft facilities and repayment of the company bonds in maturity against the cash in flow from the expected progress development claims and receipts, which Talam failed to obtain, due to  termination of the construction works. The termination was caused by the shortage of steel supplies and sands.


To overcome the problems of their abandoned housing projects, Talam have taken the following steps:


a)     Making new appointment of a new contractor and undertake certain joint ventures with other housing development contractors such as IJM (Corporation) Sdn. Bhd., IJM (Projects) Sdn. Bhd and Salam Kurnia Sdn. Bhd; and,

b)    Refund the deposit payments made by purchasers of eight housing projects.


Among the problems faced by purchasers as the result of the abandonment are:


a)     Inability to occupy the housing units on the date as promised by the developer;

b)    They have to pay monthly instalments to their respective financiers, as the financiers have released substantial portion of their housing loans to the developer;

c)     They have to rent other houses in the course awaiting the completion of the purported housing units;

d)    There are purchasers who have been blacklisted by the financiers as they are unable to regularize their housing loan accounts;

e)     There are purchasers who have divorced due to the mounting living expenses and insufficient incomes, partly due to the abandonment;

f)      Meetings and discussions with the authorities, for example, the Ministry of Housing and Local Government (MOH), always failed to render any positive outcomes and MOH, hitherto, have unable to solve their problems;

g)     There are some purchasers who have received wrong information regarding their housing project, from MOH;

h)    MOH does not categorise the late and problematic housing development projects undertaken by Talam and its subsidiaries as ‘abandoned housing projects’ in accordance with the MOH common and official definition of abandoned housing project on ‘abandoned housing project’. This has caused problems to purchasers, in their attempt to obtain confirmation of their projects as ‘abandoned housing projects’ for the purpose of getting reduction of monthly instalment payment from their respective financiers etc;

i)       MOH failed to enforce and carry out the legal provisions in the Housing Development (Control and Licensing) Act 1966 (Act 118) and its regulations and this had resulted in certain losses to the purchasers due to the abandonment.


Apart from Lestari Permai, there are many more housing development projects carried out by Talam and its subsidiary companies, which are also facing the same problems – late delivery and abandonment, viz:


a.     Bukit Beruntung (Europlus Sdn. Bhd);

b.     Putra Perdana (Kenshine Sdn. Bhd);

c.      Taman Puncak Jalil (Maxisegar Sdn. Bhd);

d.     Lagoon Perdana (Tenaga Gagah Sdn. Bhd);

e.      Ukay Perdana (Highrise) (Ukay Land Sdn. Bhd);

f.       Bukit Pandan Bistari (Supreme Precious);

g.     Ukay Perdana Superlink (Ukay Land Sdn. Bhd);

h.     Saujana Putra (Galian Juta Sdn. Bhd);

i.       Lestari Puchong (Lestari Puchong Sdn. Bhd);

j.       Bukit Pandan (Mudi Angkasa Development Sdn. Bhd);

k.     Bandar Pinggiran Cyber (Perspektif Perkasa Sdn. Bhd);

l.       Sierra Ukay (Terang Tanah Sdn. Bhd);

m.  Lestari Perdana (Abra Development Sdn. Bhd);

n.     Saujana Puchong (Expand Factor Sdn. Bhd);

o.     Saujana Putra (Galian Juta Sdn. Bhd);

p.    La Cottage (Metro Tegas Development Sdn. Bhd);

q.     Saujana Putra (Sanjung Hemat Sdn. Bhd);

r.      Templer Saujana (Abra Development Sdn. Bhd); and,

s.      Kinrara Perdana (Sentosa Restu (M) Sdn. Bhd).


See the pictures taken about the said abandoned Taman Lestari Permai.