Abandoned Project In Johor Bahru Causes Grief For Housebuyers

From http://komunitikini.com/johor/johor-bahru/johor-bahru-yet-another-abandoned-housing-project-exposed (accessed 18 October, 2011)

Posted on October 18, 2011 by Steven Chen

Some 340 aggrieved house-buyers held a demonstration in the vicinity of an abandoned housing project in Taman Mount Austin, here yesterday, holding placards in various languages demanding action by the relevant parties.

The housing project in Taman Mount Austin started in 2004 and was scheduled to be completed in 2007 but failed to materialise.

The housebuyers’ action committee chairman, Suhaini Mat Isa, 34, said that the 340 of them are utterly disgusted with the state of affairs pertaining the housing project which up to now has no solution in sight.

He said the housebuyers have given more than ample time for the completion of the housing project.

Legally speaking, he added, the housing developer is obliged to compensate the house buyers for the delay.

Suhaini explained that many of the housebuyers have been shouldering a heavy financial burden over the last few years, having to pay rent for temporary accommodation as well as service the monthly housing loan of their uncompleted homes.

Meanwhile, Permas public complaint centre officer, Syed Othman Syed Ali, said the centre will forward the housebuyers’ complaint to the Johor Menteri Besar, Abdul Ghani Othman, urging him to help to resolve the issue.

He said the centre would arrange for a meeting between the housebuyers and the state government this week.

Should the meeting fail to take place, “we shall [appeal] to the Minister of Housing and Local Government to take the necessary action,” added Syed Othman. (emphasis added).

3 responses to “Abandoned Project In Johor Bahru Causes Grief For Housebuyers

  1. Ada pemaju penyelamat tak?

  2. Where a commercial project of the nature of a housing development fails, the remedies and first steps to remedies is the appointment of a receiver or a liquidator by the petition of a creditor.

    A creditor can also be a purchaser (depending on the contribution of the purchaser) or purchasers acting jointly as a class.

    The receiver will initially act to preserve what he can of the operating company’s remaining viable assets and act to manage the assets and the company’s operations as a going concern in the hope it will return to some form of manageable state and to liquidity. If not a liquidator should be called in as is commonly the next step.

    A liquidator has more extensive powers than anyone else in such situation and should ordinarily in the execution of his duties conduct an investigation into the company’s affairs.

    If required and quite often it is, the liquidator will conduct investigations into the company’s affairs and conduct where required public examinations of directors and other parties who may have acted in the management of the company and its affairs.

    Investigations and public examinations are undertaken in order to establish root causes of failure, determine then apportion liability in an effort to track the money trail and to obtain evidence as to the reasons behind the collapse of the venture before prosecuting those behind the failure or collapse if there is reason to do so.

    Quite often there is a case to answer and criminal liability where officers of a company continue to trade whilst the company is insolvent (typically to pay themselves high fees at the expense of purchasers and investors and investor funds); or

    Where the company or project has no prospects of succeeding in the venture the directors and advisors have persisted to their advantage and to the detriment of others regardless.

    Again it is then the liquidators responsibility under the common law and statute to prosecute those who have helped themselves or paid to related parties or others unfair preferences or amounts from the company’s funds to the detriment of the company, in breach of its stated objects and to the detriment of its shareholders and other stakeholders.

    The liquidator with the assistance of the court is then able to on establishing culpability and liability recover from directors and creditors who have received unfair preferences under the doctrine of relation back. Criminal and civil prosecutions typically follow in such instances.

    Fraud has wide definitions in this respect and carries with it criminal sanctions if proved. Unless the rule of law and proper established procedures in this regard are followed, no amount of protestations and pubic gatherings will help resolve the growing economic menace of the criminality of failed housing projects in Malaysia.

    It beggars belief that purchasers who have lost their life savings then go to such gatherings and accept the pious platitudes of government ministers who are in actual fact powerless at law to do anything to assist them. it is for the courts and no one else to enforce the appropriate laws in these matters.

    There is ample evidence of fraud, theft an misappropriation of funds from many of the failed housing projects (abandoned housing projects) in Malaysia. There is evidence of Banks acting in breach of their trustee duties by dispersing funds to contractors and developers before proper due diligence to ensure the terms of the trust have been met by developers. There is ample evidence of diversion of funds to other projects and “padding” a practice whereby contractors and developers inflate their invoices for work and materials. A competent auditor can uncover such fraud.

    Equally there is liability and culpability on lawyers who have acted in the conveyance of such properties and on the contracts covering transactions to build homes that are eventually not completed.

    Many lawyers fail the most basic test of compliance with good governance and basic legal risk assessments before luring their clients into entering into such risky schemes.

    Gopal Raj Kumar

  3. In my opinion the provision governing the Housing Development Account (HDA) in the Housing Development (Control and Licensing) Act 1966 (Act 118) can be abused by the developer by the issuance of false architect or engineer certificates to the bank. The bank manager also might have been involved in the syndicated fraud to defraud purchasers. Greed… The authority (Ministry of Housing) also is too slow to enforce the law.

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