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