Grappling with contentions
18/07/2007 NST-PROP By National House Buyers Association
We refer to the Viewpoint presented by Datuk Eddy Chen, a past president of
the Real Estate and Housing Developers' Association (Rehda) and chairman of
the Board of Trustees of the Rehda Institute "Far from being rotten" (NST-Property,
In one fell swoop, the writer has cast aspersions on:
The National House Buyers'
Association (HBA) for an imbalanced perspective; for a narrow and
emotional view of the Malaysian housing scenario; and for not being able
to see the national agenda;
The Construction Industry
Development Board (CIDB) for failing in its moral duty to provide a
stronger labour force for the housing industry;
The banks for breaching their
fiduciary duty by "lending during a fine day, and taking it away when it
The Government for its
ineffective, inefficient delivery system.
The writer argued that the
Sell-Then-Build (STB) system of housing delivery has enabled the provision
of various social necessities that are peculiar to Malaysia.
We at the HBA say that not a single sen for the special and peculiar
provisions come from developers. These costs are fully shouldered by house
buyers, who collectively pay for social necessities as well as for discounts
on bumiputera quotas.
Whatever system is used to build houses ? the STB; the Build-Then-Sell (BTS)
or the 10:90 variant of the BTS, social necessities will be present. Housing
isn't the only industry subjected certain requisites: Every other industry
in Malaysia also has to operate within the framework of the National
Development Policy (NDP).
The writer claims that "less than two per cent" of housing projects have
failed or are abandoned. Translated arithmetically, it means that for every
100 buyers, two unfortunate ones are facing the devastating effect of
abandoned houses. We think even a single case is one too many!
The present STB system has unwittingly cultivated a culture where
sub-standard construction, shoddy workmanship, deviation from approved
plans, non-availability of ownership papers, non-issuance of Certificates of
Fitness and bullying on the part of errant industry players have become
Complaints from house buyers inundate our website, so much so that a happy
buyer is an exception. Many of those who have paid up or almost fully paid
up for their houses would not have the financial means to take a developer
to court over defects, major or minor.
The author also seems to suggest that revived projects should not be taken
into account when tallying abandoned houses.
However, it must be kept in mind that failed projects which have been
revived invariably incur additional costs, and therefore, do cause loss and
distress to buyers.
Public money ? yours and mine ? is used to revive abandoned projects. That
means those who cannot afford to buy a house also share the cost of reviving
projects through public funds pumped into companies such as Syarikat
Perumahan Negara Bhd.
The situation was best described by Prime Minister Datuk Seri Abdullah Ahmad
Badawi during a dinner not too long ago at a businessmen?s club in Kuala
Lumpur. There, he said: "Profits are privatised, while losses are
The continuous tightening of housing laws the writer touched on reflect
precisely the vulnerable situation house buyers, whether local or foreign,
face. This is why the government is making every attempt to protect their
On the issue that the HBA has taken a narrow, emotional view of the local
housing scene because we constantly deal with aggrieved buyers ? and there
are vast numbers of them ? we can only say this is farthest from the truth.
Our aim is to influence some orderliness in the industry so that future
generations of house buyers need not suffer.
We have an education programme, and have even mediated in several disputes
between buyers and developers. Our successes in this area come from the
strong support and cooperation from buyers, as well as through
acknowledgement from the authorities of the positive role we play.
The Tribunal for Home Buyers' Claims has proven effective where claims do
not exceed RM50,000. But what about those saddled with abandoned projects,
or with claims in excess of RM50,000? Furthermore, there are tribunal awards
that are challenged by certain developers.
And what about housing projects cunningly camouflaged as commercial ones?
And those cooperatives and government agencies that were not brought under
the Housing Development (Control and Licensing) Act until the Act was
amended in 2002? So much for the "very effective channel for aggrieved
buyers ...". The writer should surf to the Housing Ministry?s website (www.kpkt.gov.my)
to see the number of developers facing action.
Far from being imperfect, the STB method is downright hazardous for house
buyers. But the writer implies that it is solely through this system that
large numbers of houses have been delivered. We contend that the success of
the housing industry is largely due to governmental efforts, such as price
control on building materials and other essentials.
Bank Negara's guidelines for the finance industry to adopt a very pragmatic
approach to the funding of housing projects and the provision of loans are
other key factors, besides peace and political stability, which have
influenced the development of the housing industry.
In light of the many problems arising out of the widely practised STB
system, we suggest that the 10:90 variant of the BTS system be adopted as
the interim measure, with full BTS as the national aspiration. We believe
the government will not have to impose so much regulatory measures under the
10:90 system, since it would make the industry largely selfregulating.