His plate is full and he knows it too well. Housing and local Government Minister Dato’ Seri Ong Ka Ting has finally settled into his five-month-old post comfortably enough to talk shop. ‘If we had met earlier, I would have had nothing to talk to you about,” Ong says, referring to City & Country’s first request to interview him in January.

Since assuming the portfolio on Dec 14, Ong has spent time understanding the problems raised and complaints lodged with his ministry. A prioritising of tasks followed. The array of areas needing urgent attention extends from protecting the interest  of the “good” parties related to property development to arming the ministry with more “teeth” in order to be more effective.

A revamp of the Housing Developers' Act and the Town and Country Planning Act is underway. This aside, the minister is also busy with enhancing the relationship with the local authorities. The thorny issue of the issuance of the certificate of fitness of occupation (CF) is high on the agenda. Ong is cannot stopping at getting CFs issued within 14 days by all local authorities. He aims to set up one-step agency at state level for even speedier process and approval.

The efficiency of local authorities and the attitude of his ministry’s staff are also in the spotlight. He is not disputing that the ministry has an image problem and he has sent the work out: Be pro-active and lend a ear to housing woes - even if they are not within the ambit of the ministry. His staffers are expected to hear the complainants out and to collate the information.

On April 1, the ministry's licensing and advisory services department introduced a more efficient approvals process. Once accepted, applications for licences, such as developers' licences and advertising permits, will be processed within a month.

Previously, such processes could take months because of incomplete applications, Ong says. Under the new procedure, officers manning the counters must vet the applications immediately and inform applicants if the forms are incomplete. Once an application is accepted, the clock starts ticking.

The minister is equally mindful of management-related problems in high-rise homes - a matter which, he concedes, warrants urgent attention, given the increasing popularity of such homes. In the first three month of this year alone, 15,000 units of such homes - two-thirds of them in Selangor - were put on the market.

The government, Ong reveals, is close to introducing the Common Properties and Buildings Management Bill to solve the problem. He also discusses the build-then-sell concept, which he assures will not be forced on the industry as it would leave no room for the small players. “Not all small players are bad,” he says, adding that ‘big’ players were once small ones too.
 

HDAM welcomes revamp of Housing Developers’ Act

Topping Ong’s to do list is a revamp of the Housing Developers’ Act - legislation that determines the fate of both consumers and housing developers and is often a subject of discontent among both parties, especially as it governs the sale-and-purchase agreement (S & P).

For this tasks, Ong Heads a committee of developers through the  Housing Developers Association of Malaysia (HDAM), lawyers who have dealt with and have a vast understanding of the act and consumers through FOMCA (Federation of Malaysian Consumers’ Association) and CAP (Consumers Association of Penang).

“The Act is being changed not to satisfy me.” he says, adding that deliberations are on-going and that the gap (differences among members of the group) is narrowing.

Without dwelling on details, Ong hints that the ministry will scour for loopholes and plug them. Fines will also be stiffer as a deterrent to would-be offenders. He adds: “To the good developers, do not worry. We are not witch-hunting. They should be able to sleep well”.

HDAM president Dato’ Eddy Chen says while the current legislation caters for everybody-developers and consumers –the majors grouse is that it is a lengthy process to remedy any breach. What the industry needs is a speedy and efficient process to deal with complaints.

Chen says HDAM has been urging the government to come down hard on errant developers and dish out sentences that commensurate with the wrongdoing. Although few in number, he adds such errant developers could tarnish the image of developers in general.

Elaborating on the review of the Town and Country Planning Act, Ong says it is to protect the environment through ensuring coordinated efforts by both the federal and state government  in their development activities. Currently, certain requirements imposed by a state may be unnecessary in a neighbouring state. The latter may not even be aware of the impact of the requirements. ”So we feel there is a need for a National Spatial Plan, a big structural plan for Peninsular Malaysia, Sabah and Sarawak,” says Ong.

Deadline

While Ong sees some of his tasks coming to light this year, he realises others can only be put in place during the Eighth Malaysia Plan, as these involve budgetary approvals. Some changes are targeted this year to the Housing Developers’ Act, the Town and Country Planning Act. The Ministry is also fine-tuning the Common Properties and Buildings Management Bill.
“I see this whole year as a consolidation period whereby positive changes are made in the ministry to make it more effective,” he adds.

Below is an edited question-and-answers session with Ong:

As the Housing and Local Government Minister, what are your priority tasks and why?

I spent the first two months understanding problems, identifying the urgent tasks. There are just to many complaints from house buyers. Some problems concerned projects five to 10 years old and others current - like project not taking off, some stopped half-way, about quality, environment. After going through all those problems, I feel there is an urgency to revamp the Housing Developers’ Act. It still has teeth to oversee the Housing industry but there is much more to do to make the Act more complete, balanced.

Another priority area is the Town and Country Planning Act. Land matters fall under the purview of the respective states and local authorities. In the past, many development projects have been approved and carried out but some of these have not taken good care of the upstream and downstream impact. They chop, fill and cut trees. Divert rivers or even fill up rivers. Drainage system were poor. Landscaping was not a main component of the development.

The Act needs to be tightened further to have more coordinated efforts between federal and state governments. Every local authority has its structural plan. And states have their structural plan but we find that’s not good enough. One state may overemphasise on certain things but the neighbouring state may not know of the continuity, and their impact. So we feel there is a need for a national spatial plan where you have a big structural plan for Peninsular Malaysia, Sabah and Sarawak.

Enhancing the efficiency of the local council is another area of priority. All local authorities (independently) run, manage and plan for the people. My ministry, representing the federal government, coordinates and uniformises policies. We feel it is time to have a more uniform approach, especially when peoples’ expectations of local council have been raised. They no longer see the local council as a place where they just pay a few ringgit in assessment or just collecting solid waste and things like that. The role of local councils is more than what it used to be. In that respect, I feel the urgency of having a more long-term plan, a master plan, to have a standard approach in handling peoples’ problems and providing them services. Among others, local council have to be IT-oriented.

What is the time-frame for these to materialise?

We see a lot of these only happening in the Eighth Malaysia Plan because we have to ask for certain budgets.

Certain quarters say your Ministry has no teeth in control and supervision of local councils.

Constitutionally, we have to respect the fact that all land matters are state matters. And because many activities are related to land, the state governments are the ones with the say. But I believe in a good working relationship between the federal and state governments. There are certain things that are concurrent, for example, town and country planning. If the federal governments works a little bit more and brings the state government closer, then we can have better understanding and so, there is not question of who is more powerful, who is superior.

Do you see the barrier stretching beyond, to the revenue aspect?

Of course. But the federal government has no intention of depriving the states of their rights. We respect their constitutional rights. We should not emphasise on what sort of powers we would lose or gain. It should be how we can work together to improve the living environment, the quality of life, for the good of the people. And I’m sure the people welcome that. That should be the correct perspective.

Do you see this as a long and winding road simply because old habits die hard?

It will take some time to have a paradigm shift but then again, we have to show our sincerity. I believe we always take the right move, be pro-active and send all the friendly gestures that we (federal government) are here to help. We are not here to take away.

How far have you gone in doing this?

We had a good start. So far, we have gone through two meeting: the menteris besar and chief ministers’ meeting chaired by the Prime Minister and the National Council of Local Government, chaired by the Deputy Prime Minister. I realise that the MBs and chief ministers share the same aspirations. They want to improve the peoples’ lives, ensure that their states are in good condition. I see no reason why me cannot work together. And I know most of the MBs quite well. Each time I spoke with them unofficially, not only were they receptive but they even offered ideas on how we should work together. I am planning, together with my heads of department, to make our rounds to the states. We intend to brief the respective MBs on what we want to do and we will also listen to what  they are doing and what they expect of us. I think that will be a good start. Already, I have unofficially done some work with the MBs on and off.

You do acknowledge it is not going to be an easy task to accomplish?

Not easy in the sense that more resources are needed to fulfil some of the demands of the state governments. We have also to get the state governments to feel the urgency the way we do. But I don’t look at it too negatively. I also feel that it is a challenge worth taking up and to overcome. 

Certain quarters have a less-than positive perception of your ministry.

I admit we have to work a bit harder to improve  the image of the ministry. That is also my priority. Since taking office, I have given my officers a lot of pep talks and told them to be pro-active. Everybody is to go out of the way to tackle problems. Work as a team. Don’t just compartmentalise themselves and don’t put the blame on the Acts and the laws.

I have given this whole year as a consolidation period to bring positive changes to the ministry, to make it more effective and more reassuring to the people. Among other things, I am in the process of upgrading the efficiency of services. For example, effective April 1, the licensing and advisory services department has changed the approval process. It can’t take more than a month to process licences - developers’ licences, advertising permits and all other related licences. Before that, they might take a few months because, according to the reason given, some of the documents were not complete.

But after we had discussed the matter, that division (in the ministry) has agreed that applications submitted must be vetted there and then. If there is something missing, the applicant must be told about it immediately. The moment we accept the forms, the applicant must be told in a month whether it is a yes or a no. So, that has been implemented. I see it as a new work culture.
The enforcement unit has been working day and night the last few months. They know I am very strict. All complaints must be looked into. Even if it is nothing to do with us, tell them. Don’t leave them in the dark. Of course, some of the complaints may not be related to us (the ministry). Yet, I have told my officers to hear them out and still look into the matter. Sometimes, things can be subjective. For example, a buyer complains about the quality of his house but the developer concerned thinks otherwise. So, how do we satisfy the complainant? What we can do at least is to speak to the developer to find out what is happening. So, that is my priority too.

Which section of the Housing Developers’ Act needs revamping?

The Act is not being changed to satisfy me. I have had a lot of consultations. I chair the main committee. We have a open committee and have invited representations from developers and buyers. Developers are represented by the Housing Developers’ Association of Malaysia (HDAM). For the buyers’ side, there are lawyers who have dealt with a lot of house buyers, who knows the developers’ problems, who know the loopholes and who are impartial. Then there are Fomca (Federation of Malaysian Consumers’ Association) and CAP (Consumers Association of Penang). The debate in the meetings. At the end of the day, the interests of the different groups have been represented. The differences (among the committee members) are now narrowing. The gap is getting smaller.

What is wrong with the Act as it is now?

When developers follow the rule, the Act has no power. It is only when developers try to find ways and means to run away from their responsibilities, when they try to take advantage of house buyers, that the Act is important. That’s why we have to revamp the Act, including Schedule G (which deals with landed residential properties) and Schedule H (strata-titled residential properties) in such a way that if all developers behave and all house buyers stick to their sale-and-purchase agreement, then everything will be fine. But if anybody tries to get out of the agreement, this Act will say no. That is the main overview of the Act.

Does that mean the current Act is ineffective?

Many parts of it are still working well. But sometimes there can be loopholes, especially when the ministry does not have enough say over certain areas. For example, you want to go after them (errant developers) but they don’t mind going to court and pay a bit of a fine because they have made a lot of money.

Has the Act been overtaken by time?

Regulations of the Act have been changed quite a bit over the years. But in our country, many changes in the property scene have taken place in the last 10 years. That is the main point. So, we have to revamp the Act in line with the changes.

There have been a lot of complaints over the management of high-rise residential properties. What is your ministry doing about this?

We are in the process of introducing a new bill, the Common Properties and Buildings Management Bill. We were in fact ready with it when we were informed that some of the highrise residential units are within commercial complexes. Thus we are now fine-tuning the entire Bill. There is now no law governing the period of vacuum between vacant possession and issuance of strata titles for a residential building.

It is only after the strata titles are issued that the purview of the Commissioner of Building (COB) comes into force. The period of vacuum can be very long and it is also this period that sees a lot of problems. You leave it to the developers, but if they don’t perform, people complain. Currently, we do go after the developers although there is no law in our hands. However, they say only half of the residents are paying the maintenance fees. So, it is a chicken-and-egg situation. After having heard so many cases, it is clear that things will not work without a law.

The new law will be enforced even after strata titles are issued. The main principle behind the Act is that developers should not manage the buildings on their own. We want them to immediately set up an account, form a joint-committee with residents to run the management. So, there will be transparency and residents will be more comfortable to pay. In the case of a dispute, the Act will provide for the appointment of the COB to intervene. This joint committee will be permanent.
 

Number and Nature of Complaints Lodged Against Developers in 1998 and 1999
Type Of Complaint	1998	1999
Defects/Quality of works  Late delivery  Certificate of fitness Interest/Compensation Services Payment Misappropriation/Agreement letters Mortgage/Title Infrastructure Not following rules and regulations Cheating Others/Queries	192 91 99 238 59 114 66 38 22 14 46 156	222 233 150 305 94 146 131 72 40 44 100 364
Total	1,135	1,991

Do you consider the housing industry over-regulated?

From the government’s point of view, some of these regulations are necessary for a more healthy growth of the industry. But good developers have nothing to worry about. Some of the regulations were set by state governments. Again, it is a “yes” and a “no” answer. If you do not set regulations, are developers going to build low-cost homes to fulfil certain social duties? I am working towards balanced regulation of the building industry.

The certificate of fitness (CF) is still a thorny issue. Despite attempts by your ministry to overcome the problem, different sets of rules apparently still apply in different states. How are you going to tackle the problem?

We have presented papers and we want CFs to be issued within 14 days once clearance from all the seven technical departments in each local council has been obtained. Once an application with all these approvals is submitted, the CF deemed given after 14 days, even if there is no word from the local council concerned. In fact, we are even moving beyond that. Right now, there could be a delay at the technical departments. Under discussion now is the setting-up of a one-stop agency at the state level, to further speed up the approvals.

Overbuilding and excess supply are now synonymous with certain property sub-sectors. What role has the ministry played and what further action will be taken to help curb the problem?

There are numerous lessons learnt from the recent property downturn. Developers must avoid the “join-the-bandwagon” syndrome which led to their overbuilding certain types of properties when times were good. They also need to refrain from overpricing their properties and compromise quality for quantity. Developers hit during the crisis lamented that there was lack of information and to overcome this, the authorities have set up the National Property Information Centre (NAPIC).
 

NaPIC is enlisting the cooperation of certain parties, including local councils, to gather property-development-related data. How does your ministry ensure that due assistance is accorded by the respective councils?

Once the electronic link-up through computerisation from the local authorities and the ministry is complete, a free flow of online information would be in place, be it to NaPIC or even to the public.

Do you favour a build-then-sell concept?

Such a concept is too drastic to impose on housing developers. The current system works out well. If we were to build then sell, we may have only a few big boys around. Don’t forget that these big boys were once small boys too. And it does not necessarily mean that big boys are good and small boys bad.

How many complaints were lodged against developers in 1998 and 1999? What was their nature and how were they dealt with?

In 1998, 84.8 per cent of the complaints lodged were solved. The success rate for last year, however, was only 55 per cent and this was mainly due to the nature of the problems amidst the economic downturn (see table)

A final word to developers?

To the good developers, do not worry about changes to the Housing Developers’ Act. Sleep well.