In the name of speed
12/02/2005 Published in NST-PROP
A Buyer Watch Article by National House Buyers
Should we risk our safety, even
lives, just for 'faster' housing delivery?
THIS week, the HBA rebuts arguments supporting self-certification of
completed housing units from the Association of Consulting Engineers
Malaysia and Persatuan Akitek Malaysia, and reiterates the problems and
We are all house buyers. Concern about
the delivery of housing to the people must be discussed and addressed
constructively, if we are to find effective solutions. Therefore, the
question of whether the issues that we raised in the PropertyTimes issue
of Jan 8 are "the sentiments of house buyers at large" does not arise.
Simply put, we should not take the easy way out by
abolishing the existing mechanism of "check-and balance" in the issuance
of Certificates of Fitness for Occupation for completed housing units
The argument that doing away with this formality
relieves Government servants of a burden does not hold, because what
happens is that if self-certification by professionals is allowed, these
"project consultants" will get a free hand to rule the day.
The Association of Consulting Engineers Malaysia (ACEM)
and Persatuan Akitek Malaysia (PAM) must be looking at the "honour system"
of self-certification from the commercial point of view: The commercial
of the developers (their clients) against the public interest of house
However, we do not blame the professional bodies for
coming out strongly against our reservations because they have to defend
the interests of their members and their professional integrity. We do
admit, though, that not all professionals are wayward.
It is a mistake to focus solely on increasing the speed
of housing delivery through self-certification, as this is only one aspect
of the existing problems. Let us at this point consider the statement by
an expert in land laws, Salleh Buang, in his article Balancing speed with
safety (PropertyTimes, July 3, 2004), where he expressed concern that "the
abolishing of CFs for housing could open a new can of worms". When a
project or a building fails, everyone suffers, whether or not the buyers
are professionals or civil servants. If the market is anywhere near
maturity, we should see a situation where buyers are given fair deals
rather than heartaches and frustrations. To have this last protective
shield removed just to expedite the procurement of CFs is not the way.
Current legislation on CFs
In the Sale and Purchase Agreements regulated under
Schedules G and H of the Housing Development (Control and Licensing) Act
and the Regulations that come with it, housing developers have to support
the notice of vacant possession given to the buyers with "... a letter of
confirmation from the appropriate authority, certifying that Form E
(application for CF), as prescribed under the Second Schedule to the
Uniform Building By-Laws 1984, has been submitted by the vendor and
checked and accepted by the appropriate authority".
This procedure was made mandatory because of the bad
experiences many house buyers have suffered: Errant developers, through
their appointed (and equally wayward) project consultants, declare they
have "applied for the CF" when in fact they had not. They then deliver
vacant possession to the unsuspecting buyers.
Without the local council accepting the Form E and
without the delivery of vacant possession to the buyers, a developer will
not be able to collect the final 20 per cent payment on the purchase
price, and could even face the prospect of paying compensation claims for
To enhance CF issuance, Section 7(i) was included in the
housing law, which requires a developer to "inform the Controller of
Housing if the appropriate authority has refused to accept the submission
of CF". This is to end the suffering by developers of any delay,
deliberate or otherwise, caused by a local council.
The Uniform Building By-Laws, 1984 (UBBL) was also
amended and a "14-day rule" put in place to ensure that local authorities
approve any CF applied
for within that period, failing which it would be
"deemed as approved". Have all these amendments to the laws come to
nothing? Are we all sceptical about the Government delivering what it
promised? Are we now to embark on abolishing established procedures
because they are allegedly not working?
Laws are made by humans, for humans to obey and be ruled
by. Strict compliance and enforcement are required, not the removal of
tiers designed for "check-and-balance". We are as comfortable with the
abilities of the professionals in the construction industry as we are with
the abilities of accountants in the commercial sector. But does this mean
that we can do away with auditors?
Stretching this argument, dare we suggest that the
Customs Department be done away with because it is not able to stamp out
smuggling? Or do we do away with the Police Department because crimes
continue to occur? Few will disagree that there'll be anarchy without
Imposing even greater penalties on wayward professionals
is fine, but what good does this do for aggrieved buyers? There is little
point punishing fraudulent certification unless there is an effective
system to detect such frauds. Vesting the issuance of CFs in the hands of
local councils certainly instils added caution upon the professionals, and
serves to remind them of their responsibilities.
We are certain the existing situation will deteriorate
without this last tier of protection. It is an established fact that in
situations where a conflict of interest can arise, it is the presence of
an external system of check-and-balance that keeps those involved on the
correct path. Take the authority away and the law of the jungle will
At a public forum the HBA attended in Kuala Lumpur on
Oct 14 last year at the invitation of Housing and Local Government
Ministry's Department of Local Government (DLG), we raised our concerns
and made several recommendations to alleviate the problems the industry
It was against this backdrop that on Sept 22 last year
we lodged six complaints against certain architects and engineers for
making CF certifications, ranging from premature and incorrect
certification to issuance of a certificate of "partial" vacant possession.
In one instance, a "conditional certificate of practical
completion" was issued, while in another, documentary proof of the Form E
being lodged with the Majlis Perbandaran Subang Jaya (MPSJ) was provided,
acceptance "endorsed". However, in this matter, we obtained evidence
We followed up on our complaints with an official letter
to the Housing Ministry on Oct 20, in which we raised several questions,
1. Does the move for self-certification mean the 14-day rule put in place
for CF issuance is not working? If not, why? Is anything being done to
make it workable?
2. Were the views of the local councils sought? If not, why? After all,
these councils often bear the brunt of complaints from house buyers,
because developers pass all blame to them.
3. Is there any feedback on our specific complaints against certain
architects and engineers that was lodged with the DLG on Sept 22 last
year? Have these cases been investigated? If not, why?
4. Is the DLG aware that self-certification for CFs is not working, either
in New York or in many cities of the United Kingdom? Have studies on
reasons for such failure been made?
5. On-site architects and engineers have informed us that local councils
do not exercise their "we can move in anytime to inspect" powers. There is
even accusation that local councils "hardly do any inspection of
construction in progress". Is there truth in such allegations?
Unfortunately, we have not received any reply to these
pertinent questions. So much for accountability!
No end to cheating
A group of bungalow plot buyers in Negeri Sembilan have
it in their agreements that "infrastructure works" including "water
reticulation as well as the sewerage and water treatment systems" would be
in place prior to delivery of vacant possession.
The buyers paid the full purchase price for their plots
after the site engineer certified the completion of works, notwithstanding
the "non-availability of sewerage and water treatment systems". The
developer is now in liquidation. So, how can these buyers proceed to build
Another case referred to us involves deviation from
building plans, a problem many house buyers would be familiar with.
Apparently, when complaints were raised, the certifying architect's reply
was that "it doesn't matter whether the wall is crooked, so long as it has
The professional who issued the Certificate of
Completion (of construction works) added salt to injury, saying: "... this
is what you get for the price that you are paying ... don't expect too
The standard reaction of the ordinary house buyer is to
blame the Government agencies for their lack of supervision and
enforcement. Is this something we don't know? Have civil servants who've
heard harsh words not passed the message up?
Which brings us to the next pertinent question: Should
the Government continue to bear its obligatory responsibilities in the
delivery of housing fit for occupation to the citizens? Or should it move
for self-certification of CFs, and appear blameless for delays?
Enforce to the fullest
We say the status quo must remain. Local councils should
retain responsibility for the issuance of CFs, and enforce the UBBL to the
fullest. They are closest to what is happening in the building industry,
from the day approval for a housing project is granted, and are in the
best position to ensure compliance with all conditions.
Let us not forget that project consultants are in the
payroll of developers. Let us not forget that they can only make
guarantees in their individual capacities. Let us not forget that we are
dealing with housing for the masses, not the construction of an automated
What happen next depends very much on the report the
Housing Ministry will submit to the Cabinet. We hope that our reasons are
coherent enough to convince our leaders that no system can function
without a check-and-balance in place.
* The National House Buyers Association (HBA) is a
non-profit, non-government and non-political organisation manned by
volunteers. Its website is www.hba.org.my. E-mail: email@example.com