PEMUDAH 2011 Annual Report on Abandoned Housing Projects in Malaysia

Below are the current policies and initiatives of the Government of Malaysia to deal with the problems of abandoned housing projects as reported by PEMUDAH 2011 Annual Report.

 Abandoned Housing Projects

 (i) Completed and resolved 94 of the 116 abandoned housing projects (as at 31 December 2011);

(ii) Introduced Build-Then-Sell (BTS) Concept;

(iii) Amended the Housing Development (Control and Licensing) Act 1966 (Act 118); and(iv) Displayed list of developers that are blacklisted and housing projects that are facing problems, on the website of the Ministry of Housing and Local Government (www.kpkt.gov.my).

Abandoned Housing Projects

(i) Further reducing and curbing the occurrence of housing projects being abandoned:

(a) Home Completion Insurance/Guarantee Scheme; and

(b) Amendment to the Payment Schedule under Act 118 and other related Acts with the view of issuing Land Titles and Vacant Possession simultaneously.

4. ABANDONED HOUSING PROJECTS

In 2011, the Special Task Force on Abandoned Housing Projects succeeded in resolving 32 abandoned housing projects. The remaining 62 projects (involving 26,486 units and 17,400 house buyers) are in the midst of various stages of revival and completion whereas 22 projects are currently undergoing various stages of ‘rescue’ by ‘white knights’ identified by the Government. Other initiatives implemented to curb abandoned housing projects are as follows:

(i) Build-Then-Sell (BTS) Concept by licensed developers to be fully implemented by 2015 with the house buyer syariah compliance financing scheme; and

(ii) Amendment to the of Housing Development (Control and Licensing) Act 1966 (Act 118) which included:

(a) 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);

(b) 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;

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

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

(e) Prosecute developers responsible for abandoned housing projects; and

(f) 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 list of black listed developers and problematic housing projects are available in the Ministry of Housing and Local Government (KPKT) website (www.kpkt.gov.my).

5. ABANDONED HOUSING PROJECTS

The Ministry of Housing and Local Government (KPKT) has initiated the following to further reduce and curb the occurrence of housing projects being abandoned:

(i) Home Completion Insurance/Guarantee Scheme; and

(ii) Amendment to the Payment Schedule under Act 118 and other related Acts with the view of issuing Land Titles

… (emphasis added).

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