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Boost for Home Buyers - Changes in Property Law on the Horizon
13/12/2006 By National House Buyers Association
Published in Iproperty Magazine

Property buyers and home owners are to benefit from new legislation as well as amendments to existing legislations that are being tabled in parliament.

Here's an insight on the looming amendments and new legislation gathered from the various media articles.

Gated Community projects
This amendment will put the problems of getting strata titles and managing the shared common property of developments not defined in the Strata Titles Act, 1985, to rest. This type of project commonly termed as 'strata' gated community of the non high-rise / townhouse type has been gaining popularity in recent years.

The Cabinet has approved amendment to the Strata Title Act 1985. This was reported in a local paper on 9th November, 2006 by Natural Resources and Environment Minister YB Datuk Seri Azmi Khalid and expected to be passed next year.

On another development, the Selangor Housing and Property Board has issued guidelines for gated community developments approved by the State Executive Council on Oct 4. Those wanting to set up gated and guarded community will have to first obtain permission from the local authorities in that State.

Certificate of Completion & Compliance (CCC) to replace Certificate of Fitness for Occupation (CFO)
Under this amendment, the responsibility of the issuance of CFO would be shifted to the architects and engineers of the project, replacing the traditional CFO issued by the Local Councils. This is expected to be enforced next year. According to a report in Bernama.com on 28 November 2006, the CCC is meant for new projects while those currently under construction will still be issued with the CFO.

Currently, CFO can be issued only after certain conditions as stipulated in the Uniform Building By-Laws (UBBL) are followed. The CFO will be issued after:

  • the person submitting the plan, such as an architect, has acknowledged in writing or in the application form, that is, Form E, that he had supervised the construction of the building. To his knowledge, the building has been built according to provisions under the UBBL. He has agreed to take full responsibility for the parts related to them;

  • officers of the Local Council have inspected the building; and

  • conditions imposed by the Local Council when approving the building plans pertaining to basic amenities such as access roads, landscape, parking space, drainage, water, electricity, elevators, fire hydrant, garbage disposal and other facilities have been prepared.

Usually these basic amenities are verified by the related technical agencies such as the Waterworks Department, Tenaga Nasional, Fire and Rescue Department, the Works Department and others.

Some of the reasons cited for this shift are: to help reduce bureaucracy; encourage self-regulation and to cut down waiting time for home buyers after receiving vacant possession from the developers.

The Minister of Housing & Local Government, YB Datuk Seri Ong Ka Ting has reassured the public that the Local Councils would still have a role to play to ensure checks and balances and can from time to time, when work is in progress, check whether the developer is complying with the specifications, and if any deviation from the technical specification is noticed the local councils can intervene and if conditions are not met can also stop the CCC from being issued.

Management & Maintenance of Common property

This long awaited Common Property (Building & Maintenance) Bill has been tabled for first reading at the Parliament on 5th November 2006. This Bill introduces Building Commissioners to be appointed by State Governments to look into problems of strata titled properties from the time of delivery of vacant possession till the formation of Management Corporations. The Building Commissioner will be given powers to come into the picture to enforce the relevant laws when there are disputes or abuse, says Housing and Local Government Minister Datuk Seri Ong Ka Ting in a Bernama 28th November, 2006 report.

Once this specific law is introduced, developers and owners are expected to form a joint management committee to manage and maintain the common properties. This will give owners a say in how the common properties will be managed. Strata title property owners who have yet to form the management corporation for various reasons like: strata titles not applied yet, permanent CFO yet to be obtained, problems with issuance of strata titles, etc, will get to see more transparency in the made up of their contributions towards the management fund & reserve funds for major repairs.

This is one Act, stratified property owners should be watching closely and be ready to form a transition committee with the developers once implemented. We hope the Bill will also see through the periods where Management Corporations are already formed but under the initial periods where the control has not shifted to owners.

Housing Development (Control & Licensing) 1996 (Act 118)

The amendment bill has also been tabled in Parliament for reading on 5th November, 2006. The salient points of the amendments as reported in local papers are:

  • Empowers the Minister to cancel exemptions given to housing developers on the opening of Housing Development Account and submission of audited reports to government agencies.

  • The ministry's secretary-general will also have the right to freeze the housing development accounts of developers

  • Empowers the Minister to appoint new companies to take over the business of a housing developer who have not fulfilled its obligation without the need for prior reference to the Minister of Finance.

  • Raising the jurisdiction limit of the Tribunal for Homebuyer Claims to RM50,000.

  • heavier penalties on the developers if the projects were delayed

  • Gives buyers' rights to cancel the purchase if 70% of house buyers of a project agree to terminate the sale-and-purchase agreement six months after signing if there was any problem relating to the progress of the project. Currently, only the developers have the right to terminate the agreement.


Amendments to existing legislation:

  • Housing Development (Control & Licensing) Act, 1966;

  • Architects Act, 1967;

  • Registration of Engineers Act, 1967; & Street, Drainage and Building Act, 1974

  • Strata Titles Act, 1985


New legislation
Building and Common Property (Maintenance & Management) All the above are under the purview of three (03) ministries; Ministry of Housing & Local Government; Ministry of Works and Ministry of Natural Resources and Environment.

 

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