Article From New Sabah Times, Dated 27 November, 2008: ‘Review needed to avoid abandoned housing projects’

KUALA LUMPUR: “I have to pay the bank RM1,200 monthly, but my house is not completed yet and in fact the construction work has been abandoned. “The sales and purchase agreement was signed in June 1999 and the completion date given was June 2002, yet until today (November, 2008) there are no signs that house will be ready for occupation,” lamented Kamarolzaman Ismail to Bernama on the house that he purchased in a housing project near Puncak Alam, Selangor.


Meanwhile, in Seri Kembangan 561 buyers of single story terrace houses are in a fix. They were promised vacant possession in 2005 but construction work has stalled. “As at November 2008, the houses are yet to be completed,” said the Buyers and Claims Committee chairman Mat Ali Hanafiah Mohamed who represented the buyers. “We have to service the loan to avoid being sued by the banks and at the same time have to pay rental for the houses that we are occupying now,” he too lamented.


Kamarolzaman and Mat Ali are among the unfortunate house buyers who have many time met with the authorities to find ways to revive their respective housing projects but there is no solution in sight for them. Though year after year abandoned housing projects have been widely highlighted by the local media, the authorities are yet to find an effective solution to help buyers who are left in a lurch.


According to the statistics provided by the Housing and Local Government Ministry, abandoned housing projects are nothing new and has been reported since the 1970s. Even now housing projects are being abandoned and their numbers are expected to increase especially when looking at the current poor economic outlook. According to the statistics from the Ministry, the total number of abandoned housing projects up to June, 2005 numbered 277, with 50,183 buyers, 75,356 dwellings and the projects were worth RM7.033 billion.


According to a law don at Universiti Utara Malaysia (UUM), Nuarrual Hilal Md. Dahlan, the numbers provided does not represent the true picture. This is because some of the abandoned projects are not listed in the abandoned housing projects list or the project files have been closed. “Furthermore, the total number reported by the Ministry does not include projects undertaken by independent contractors, cooperatives and ‘others’ who are not under the purview of Housing Development Act (Control and Licensing) 1966 (Act 118) and also abandoned housing projects in Sabah and Sarawak. “Thus, if these projects are taken into consideration, definitely the actual figure is much higher. This will then send a clear message on how to avoid abandoned housing projects and ensure the rights of the buyers are protected,” he said.


According to Nuarrual Hilal, among the reasons for abandoned housing projects includes the inherent weakness in the housing development system, the loopholes in the laws and the lack of enforcement in the part of the ministry, local enforcement agencies, planning and technical authorities. Even more lacking is the political will in implementing significant and radical changes in the housing sector where the problem has persisted since the 1970s. He is of the opinion that if all the housing developers in Malaysia implement the ‘build and sell’ concept, the question of abandoned housing projects will not arise. This system, for example, has been implemented in Singapore and New South Wales, Australia. In Singapore, this task was entrusted to the Housing Development Board (HDB) under the Ministry of National Development. To emulate Singapore, the government must entrust the task to a government agency with adequate financial resources to implement housing projects all over the nation. This agency will then carry out housing projects based on the ‘build and sell’ concept as done by HDB. What ‘build and sell’ concept means is that the developer can only sell the houses when they are completed with Completion and Conformation Certificate (CCC) issued and the ownership can be transferred to the buyer immediately.


Nuarrual Hilal noted that insurance coverage for housing projects, as implemented in New South Wales can also be implemented in Malaysia. This is to ensure that in the event the developer defaults in his obligation that buyers still have an avenue to see their homes completed.


In a nutshell, a comprehensive review is needed on the National Land Code (1965), planning laws, building and housing laws, Town and Country Planning 1976, Street, Drainage and Building Act 1974, Building By-laws 1984 and Housing Development Act (Control and Licensing) 1966.


The review should also include provisions for special laws to regulate the rehabilitation of abandoned projects.He opined that though there was several provision introduced in some of the legislations in 2007, it remained insufficient as it failed to address the core problems, especially those involving abandoned projects.


Looking at the failure to prevent abandoned projects, he advised the public to only buy houses completed with CCC. “Maybe they may cost more, but it saves the trouble for the buyers. “The government must take effective steps, including implementing the above proposals, to prevent public and investors, local and foreign, from losing confidence on the real estate and the banking industry due to the risks from abandoned projects,” he said ending the interview.




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