Who does the government protect, the buyer/consumer, or the local authorities? CAP is of the opinion that the relevant authorities are not protecting the consumers/buyers, but are instead providing leeway for housing developers to make profit at the expense of the buyers.

The whole question of handing over vacant possession of the property is crucial to understanding why the present situation places buyers at the losing end.

The Housing Developers (Control and Licensing) Act 1989 clearly states that the developer has only 24 or 36 months from the date of the sale and purchase agreement to hand over vacant possession. But this speedy issuing of vacant possession seems to have been manipulated by the developers to rid them of the responsibility of maintaining the constructed buildings and its surrounding infrastructure while applying for the Certificate of Fitness for Occupation (CF).

Most developers rush to issue the vacant possession, and many violate the Act. At the time vacant possession is issued, the buildings are not completed, the surrounding infrastructure are not completed, and the buildings are not ready for electricity and water connection.

Somehow or other, the developer gets the architect of the project to issue a certificate, which states that proper stage had been completed and is ready for vacant possession. This certificate allows the developer to hand over vacant possession, the keys, and the responsibility to maintain the property to the buyer, although the buyer cannot occupy the buildings as yet.

The compelling motive behind this speedy issuing of vacant possession is probably the Schedule of payment of purchase price outlined in the Act. (See Table)

STAGES                                                                   

c. the walls of the building with door and window frames places  in position

solicitor receives this portion to be handed over to the developer

So when the vacant possession is given, the bank or financial institution would have finished releasing the payments, and when this happens, the buyer must start paying the housing loan with interest.

This is where the disadvantage to the buyer lies. With the help of the architect, the developer rushes to give vacant possession (for fear of having to pay damages to the buyer), although the building and surrounding infrastructure have not been completed. The buyer has to then start paying for a property that has not been properly constructed.

The Act states that the developer would have to pay damages to the buyer if vacant possession is not delivered on time. However, more often than not, buyers are not able to claim damages at the rate of 10% per annum of the purchase price because the developers often claim that they are in financial difficulty. So even when the buyers take the developers to court to demand damages for late delivery of vacant possession, the developer claims he has no money. The buyers would then have to face with more legal problems and costs.

If the developer does not speed up applications for the CF, the buyer would have to continue paying for a property that he cannot occupy, while at the same time maintaining rent payments for the property he is currently occupying.

In addition, the buyer may be in a tight spot when it comes to tenancy agreements for his property he is renting, because he is completely unsure as to when his purchased property will be ready for occupation.

Thus, in the case of the Wisma Telaga low cost flats in Seberang Perai, Penang, the buyers had to start paying the instalments for the housing loan, including interest, in December 1989. At the same time, the buyer would have had to pay the rent for the property he is currently occupying. And so for the next 11 years, the buyer would have had to pay double for housing. Worse still, the buyers will now have to fork out more money to repair their vandalised property.

And even though the delay in obtaining the CF can be blamed on the developer, the developer gets off scot-free with the full amount of the property price in his pocket, not having to worry about maintaining or safeguarding the property any more.