Housing law needs major revamp
18/03/2006 Published in NST-PROP
A Buyer Watch Article by National House Buyers
Down Memory Lane
Widespread changes to the Housing
Development (Control & Licensing) Act 1966 are needed to protect housebuyers,
says the National House Buyers Association (HBA).
In a statement to Property Times,
Chang Kim Loong, the non-governmental organisation's secretary-general, said
voluminous recommendations have been forwarded to the Ministry of Housing
and Local Government over a number of occasions.
Among the major points raised is
the need for a wider definition of the terms "housing accommodation" and
"We want these terms expanded to
include 'serviced apartments' and 'vacant bungalow plots' offered for sale
by developers," said Chang.
"This will prevent developers
from circumventing the present law."
Currently, residential projects
developed under the guise of "serviced apartments" can deprive unwary buyers
of protection under the housing law.
Chang said HBA also wants the
paid-up capital of a developer to be increased to "at least 30 per cent of
the project cost".
"The paid-up capital for a firm
to obtain a licence from the Ministry of Housing and Local Government is now
insufficient - a mere RM250,000 and a cash deposit sum of RM200,000," he
"The proposed increase should
reflect the developer's seriousness and ability to commit to building
Another change the HBA wants is
for the application for strata titles to be made together with that for
building plan approval, to ensure that buyers who pay up the purchase price
are not deprived of their title deeds.
Deeds of Mutual Covenants (DMCs)
must also be standardised and regulated for all developers to adopt in order
to ensure fair protection to residents.
"This will ensure that there is
no uncertainty pertaining to house rules such as renovation deposits, the
clearing of debris and refund of deposits'" said Chang.
"As it stands, there are
complaints that car-parking bays have not been included in the deal when
some purchasers buy apartments, but this only comes to light when the buyers
take vacant possession of their units.
"How this has happened is by
developers reserving exclusive ownership of the lots, usually via a clause
cleverly embedded in the DMC."
On the issuance of Certificates
of Fitness for Occupation (CFs), he aid the HBA believe it is time the
market adopted the concept delivery of vacant possession together with CFs".
"This is needed because taking
vacant possession without CFs is meaningless and detrimental to buyers,
since they will not be able to move into their homes but the 18-month defect
liability period will start to run down.
Also needed to be issued with CFs,
said Chang, are common facilities found in stratified residential projects,
such as swimming pools, play-grounds and gyms in order to "prove they are
completed and certified fit for use".
"Our recommendations are merely
an interim measure, pending the Government's acceptance of our proposed
10:90 concept of housing delivery, and our long-term plan for the industry
to adopt the build-then-sell system for housing delivery," h e said.
"When that time comes, more
legislation need not be necessary as buyers will know exactly what they are
HBA Editor's Note: These recommendation were made on 12.10.2001 vide