A cry for resolution

05/04/2003 Published in NST-PROP A Buyer Watch Article by National House Buyers Association

Eloquent discourse will not resolve our strata title woes, only concerted effort will

Rhetoric will not resolve the problems of homeowners without strata titles. What we need is a clear understanding of the operation of the law and the magnitude of the problem. A news report published in early March showed that we are far from reaching the stage where something meaningful can be done to resolve the problem.

Stemming from that report which quoted Deputy Minister of Land and Cooperative Development Dr Tan Kee Kwong, we wish to clarify two points.

First, we would like to dispel the notion that the use of private surveyors by developers has caused the delay in the issuance of strata titles. In fact, the Strata Titles Act, 1985 (the Act) specifically allows surveys to be conducted by qualified private professionals licensed by the Land Surveyors Board.

Second, we find it hard to believe "that slightly more than half the high-rise buildings have been issued with strata titles.

We have yet to see an effective way to resolve the problem. And with more and more stratified properties being built by the day, the situation may get a lot worse before we see any improvements.

The Act has been around for 18 years and the problems faced by housebuyers can be due to the following:

a) Old buildings (prior to the implementation of the Act) without strata titles;

b) Non-application or rejection of applications made by the developer/land owner. For the former, the lack of enforcement on the part of the authorities to compel the relevant party to make the applications also played a role;

c) Orphaned projects, where the developer/land owner has been wound up, making it more difficult for strata titles to be applied for.

Although the problems are obvious, the magnitude has been shrouded in a veil of denial. Unlike buyers faced with abandoned projects, relevant authorities show little concern for homeowners without strata titles.

In our statistics maintained over the past two years, problems with strata titles top the list of complaints received from buyers.

Non-issuance of strata titles make up 27 per cent of the total complaints received by us for the second year running. Unless drastic measures are taken, it will no doubt continue to top the chart for the third and subsequent years to come.

Here are HBA's recommendations:

Prosecution not warnings

The Ministry of Land and Cooperative Development (the Ministry) should prosecute errant developers who fail to apply for strata titles. Giving warnings with empty threats of prosecution are insufficient.

Penalise developers and/or their directors

If errant developers continue to drag their feet by deliberately not applying for strata titles, then the government should enact a law to take over their task, either on its own or through privatisation. Such costs and incidental expenses incurred could then be billed to the developer.

Perhaps a further law should be passed to make directors and officers of the developer liable to reimburse the Ministry of Housing and Local Government or related agencies of whatever costs and expense incurred incidental to the application and issuance of the strata titles. We already have similar laws concerning sales tax where directors are personally liable in the event of default by the company.

Adopting orphaned buildings

Where a developer has been wound-up or where the Ministry is satisfied that it is insolvent or incapable of applying for strata titles, such applications can be made by a vehicle similar to that of Syarikat Perumahan Negara.

While helping to alleviate strata titles woes, revenue could also be generated in the form of stamp duty to be paid on the Memorandum of Transfer to the eventual owners.

Proactive steps

Instead of waiting for complaints to be made, the Ministry should adopt a proactive stance and conduct a survey to determine from the developers/building owners, local authorities and house buyers the number of buildings without strata titles.

Local councils and the Ministry of Land and Cooperative Development should be in close communication to enable the former to extend copies of Certificates of Fitness for Occupation (CF) for stratified properties to the latter so that it can monitor and coordinate the mater. With close cooperation between both these authorities, we may then begin to see the light at the end of this dark tunnel.

One-stop centre

The one-stop centre that some states have mooted has not been highlighted, Its success or failure is largely unknown. In the event that such one-stop centre has been progressing well, then others should follow to see expeditious issuance of strata titles.

The Malacca solution

Malacca chief minister Datuk Seri Wira Ali Rustam has been at the forefront of a system where the developers are to submit applications for strata titles when applying for building plan approval.

The consequence: Strata titles must be issued at the same time as the issuance of CF. HBA has time and again suggested that the Ministry of Land and Cooperative Development take heed of the Malacca solution.

The above recommendations are not exhaustive. Members of the public are invited to put forward their recommendations for solving this problem. You may send your suggestions to our e-mail address.

We fear the day will come when the departments concerned with strata title applications will be so overwhelmed with backlog cases that something similar to the writing-off of unsettled traffic summons may need to be studied. Quick and effective action to boost manpower and proactive steps need to be taken immediately.

The Ministry of Land and Cooperative Development must ensure that buyers of strata title properties get their ownership titles.

The interests of developers/land owners should not take priority over the interests of homebuyers.