REHABILITATION OF ABANDONED HOUSING PROJECTS: A COMPARATIVE ANALYSIS ON LAWS AND PRACTICES IN PENINSULAR MALAYSIA, NEW SOUTH WALES AND AUSTRALIA – US-CHINA LAW REVIEW, Vol. 7, No. 8, August 2010 (Serial Number 69), pp. 1-26.
Nuarrual Hilal Md. Dahlan
Md. Rejab Md. Desa
College of Law, Government and International Studies,
Universiti Utara Malaysia
Even though there are laws and policies promulgated by the Malaysian government to govern housing industry, abandoned housing project is still one of the housing malaises in Peninsular Malaysia. If it is not feasible to rehabilitate the abandoned housing projects, they will be stalled forever to the detriment of the purchasers. Virtually, there is no universal way to resolve this problem due to the fact that issues faced by the stakeholders are different in almost every abandoned housing project. Thus, different methods are absolutely necessary to tackle the problems especially to rehabilitate those projects. To this point, laws and practices in New South Wales, Australia may deserve consideration.
Keywords: abandoned housing projects, rehabilitation, Peninsular Malaysia, New South Wales, law and practice.
THE POSITION IN NEW SOUTH WALES (NSW), AUSTRALIA
As in NSW there exists a ‘full build then sell’ system coupled with the statutory requirement on the owner-builder and the developer to possess Home Warranty Insurance, it is opined, the problems of abandoned housing project and its consequential losses will be minimized in NSW. On the other hand, if the owner-builder chooses to apply the ‘buying off the plan’ or ‘quasi build then sell’ system, the interests of the house purchasers will, to some extent, be protected also. Likewise the rights of purchasers are protected, even if an inevitable abandonment also does occur in NSW, because there is a Home Warranty Insurance which could cover any non-completion of the residential works undertaken by the owner-builder, the developer and the licensed contractor due to insolvency, death or disappearance of the owner-builder, developer or contractor (sections 92, 99(1)(a)(b), 95, 96 and 101 of the Home Building Act 1989 (HBA) and regulation 56(1) of the Home Building Regulations 2004 (HBR)).
The insurance coverage is to protect the purchaser against any risk of loss resulting from non-completion of the residential work because of the insolvency, death or disappearance of the owner-builders or the contractors and for the purpose of recovering any compensation from the owner-builders, the developers and the contractors for any breach of statutory warranty in respect of the residential building works or to have owner-builders, the developers and the contractors rectified any such non-completion of works or defective works (section 99 and section 101 of the HBA and regulation 56 of the HBR).
The subject matter and period of coverage of the insurance must include loss arising from non-completion of the work for a period of not less than 12 months after the failure to commence, or cessation of, the residential building works (section 103B(1) of the HBA). Other types of losses covered are–structural defect, if discovered in 6 years after the completion of the work or the end of the contract relating to the work, whichever is the later (section 103B(2)(a) of the HBA). For losses other than structural defect, the insurance can cover defects within 2 years after the completion of the work or the end of the contract relating to the work, whichever is the later (section 103B(2(b) of the HBA). The contract of insurance too must contain a mandatory provision imposing obligation on part of the insurer to pay any claim once the losses as covered by the policy occurred (section 103B(5) of the HBA). The minimum coverage for the insurance is $300,000.00 for each dwelling.(regulation 60 of the HBR read together with section 102(3) of the HBA). For a single residential flat building where the contract price exceeds $12,000.00, the coverage must also cover the (a) work on the common property of the existing single residential flat building and (b) work on an existing single residential flat building if the whole building is owned by the same person (regulation 69 of the HBR)”