Blind to victims
15/04/2006 Published in NST-PROP
A Buyer Watch Article by National House Buyers
Cost of revival
The buck stops here
Even with all the supposed protection embodied in the Housing Development
(Control & Licensing) Act, hundreds of thousands of house buyers continue to
grapple with problems such as shoddy workmanship, late delivery, deviation
from approved building plans and non-issuance of title deeds.
To find the root of all these issues, and more, we only have to look at the
current “Sell-then-Build” (STB) mode of housing delivery where developers
are allowed to collect money upfront even before starting on their projects.
However, these setbacks pale in comparison with the devastating effects of
housing projects that are abandoned.
Over and above the derailment of their plans to own a home, they have to
continue paying for the housing loan (plus interest), as well as rent for a
house to live in.
Such a scenario is downright unacceptable – how can they be expected to
simply shrug their shoulders and accept their predicament as a bad buy, or
The average working person who buys a house does so in anticipation of
owning one of the most precious investments he’ll ever make. He doesn’t do
so thinking that one day, he might be involved in some form of litigation,
or forced to approach the Tribunal for Homebuyers Claims to get his
It should not be forgotten that for every buyer involved in a problematic
project, there are three or more family members or dependants who will also
suffer the consequences. The Government of the day, if it is at all caring,
must surely be sensitive to the sufferings of victims of abandoned housing
More than just monetary loss
Their loss is more than just financial, and is far worse than what may be
reported in the media. Buyer after buyer has revealed to us in the HBA how
they have not just been financially ruined, but also suffer on the family,
emotional and health fronts.
Clearly, this is untenable. How can a country that can develop world-class
infrastructure still not be able to overcome a major consumer and industry
problem, allowing it instead to fester?
Abandoned housing projects should be at the foremost of the Government’s
concern. Is there anywhere else in the civilised world where one pays for a
house but never gets to live in it?
Even the police
Stretched out across Malaysia, from Kuantan in Pahang to Mersing and Segamat
in Johor and in Kinarut, Sabah, are 12 incomplete police projects, mostly
houses. They lie in shambles, some without electricity and plumbing, some
without roofs and some with just a mass of foundation columns.
They were to have been RM500 million worth of houses where 2,670 police
officers and men could live in. However, as things have turned out, they are
now just eyesores to those living near the projects and sources of
embarrassment to a Government pursuing a 21st Century developed nation
If even the police can face such problems, what hope does the ordinary buyer
have in avoiding the ills that can come about with the STB system? In other
words, if irresponsible developers or contractors can cheat the Government
of Malaysia, what protection can the ordinary buyer hope for?
In 2004 alone, 227 housing projects were abandoned in all the States of
Peninsular Malaysia, involving some 75,356 houses worth RM7 billion.
Selangor topped the list, with its band of rogue developers abandoning 55
projects, followed by Penang (24 projects), Negeri Sembilan (22) and Perak
and Johor (19 each).
Two years earlier in 2002, though, the Ministry of Housing and Local
Government said there were 544 abandoned projects involving 125,646 units
and 80,070 victims. Elaborating, it said the total value of the projects was
a whopping RM9,496,675,000!
The contrast between the two sets of data has led us at the HBA to feel that
the present-day figures have been “toned down”. Is it believable that 317
abandoned housing projects can be revived in just two years?
Recently, the Selangor Government revealed that the number of abandoned
projects in the State increased to 61, affecting 18,000 house buyers. A
total of 17,512 buyers were affected when Selangor was faced with 55
abandoned projects in 2004 – so, does this mean that just 488 buyers were
affected by the six freshly abandoned projects? The numbers just do not add
The figures also do not include projects undertaken by cooperative societies
and State Agencies as they were governed by the Housing Development Act
until the 2002 amendments came into force.
Simply put, despite the numerous amendments to the Act, the last being on
Dec 1, 2002, the abandonment of housing projects continues to be a major
Prime Minister Datuk Seri Abdullah Ahmad Badawi gave RM2 billion to Syarikat
Perumahan Negara Bhd (SPNB) last year to revive abandoned housing projects.
Should taxpayers continue to shoulder the burden of the defaulting
developers? Should such developers be allowed to continue to do business
under a different name?
Will the Government ever work to end the misery of victims of abandoned
Why should house buyers take all the risk and bear the brunt of the pain and
suffering caused by the current method of housing delivery?
The focus should be clear – the prevention of projects from abandonment. The
only way to achieve this is to adopt a “pay for a completed property”
system. This is far better than attempting to plug up the shortcomings in
NUMBER AND VALUE OF ABANDONED PROJECTS IN 2004
No. of Projects
No. of Houses
No. of Buyers
Value (RM Million)
In the Government’s assessment of the Build-Then-Sell (BTS) method of
housing delivery as a means to prevent future buyers from facing grief
caused by project abandonment, Housing and Local Government Minister Datuk
Seri Ong Ka Ting on March 30 said it must not disrupt the availability of
Having read all the documents submitted by the various parties on the BTS
method, he said, the Government would also pay attention to two other
factors: Better protection for house buyers; and a guarantee that the
housing industry would not be hampered by a lack of capital or financing
Related Article: Cost of revival