Change laws to protect buyers
Source: Utusan Konsumer July 2001

CAP is of the opinion that there should be more effort made and legislation drawn to protect property buyers.

The Housing Developers Act should be amended to state clearly that the developer can only deliver vacant possession after CF has been obtained.

CAP believes that this one amendment can put an end to the problems outlined above.

And since one of the main motives behind the granting of vacant possession before works are completed is the progress payments of the purchase price, the easiest way to eliminate the problem would be to do away with the progress payments completely.

Instead, the buyer should only pay 10% of the purchase price upon signing the sale and purchase agreement, and the balance of the purchase price can be collected upon delivery of property with CF to the buyers.

In this way, the developer is held more firmly to the CF application process and there is more compulsion to speedily obtain the CF, which would in turn benefit the buyers.

To safeguard against the developers still dallying with construction and the CF application, the Act should still state that if vacant possession is delivered late, then the developer should pay damages to the buyer at 10% per annum of the purchase price. But it should be stated that vacant possession can only be given together with CF, AND the damages payments should begin immediately after the date vacant possession is supposed to be delivered and continue until vacant possession is actually delivered.

In addition, the Act should also include a specific penalty for the architect who falsely certifies the completion of works to allow the developer to apply for and obtain the CF.

Build, then sell

One concept that can in the long run eradicate the current problems faced by the buyers is the build and sell concept, which was advocated by the former Minister of Housing himself.

Although it would cost more for properties to be built, buyers would be guaranteed of quality homes and would have a real vision of the homes they were buying, just like they do of the other products they buy off the market.

Buyers need not worry about shoddy workmanship, poor quality materials, non-completion of common facilities, and the like, because the developer would have to build quality homes to attract prospective buyers.

The government would not have to worry about fly by night developers and abandoned schemes, thus saving the government a lot of cost and expense to revive abandoned projects. The concept would ensure that only reputed developers with serious intentions and stable finances would stay in the industry.

It is crucial that the government makes real efforts to change the situation for house buyers in the country. There should not be any obstructions to making the amendments to the law that would benefit and help the consumer, if the consumer is the real priority in government decisions.