Why "build-and sell" a better
KUALA LUMPUR, Thurs. - Cases of buyers being left
stranded due to housing projects being abandoned by developers will
be a thing of the past if the "build-and-sell" scheme is adopted by
This is the response from the National House
Buyers Association (NHBA) to Prime Minister Datuk Seri Abdullah
Ahmad Badawi's statement last Friday that the Government was
studying the possibility of making housing developers build houses
first before selling them.
"The overriding principle of the proposal should
be that the developers should not be allowed to collect payments and
to reap profits before they deliver their products.
"The scheme will ensure that only responsible
companies are involved in housing projects," NHBA secretary-general
Chang Kim Loong said.
"According to the 2002 statistics from the
Ministry of Housing and Local Government, the number of abandoned
housing projects nationwide was 544, involving 125,649 units of
houses worth over RM9.4 billion and affecting 80,070 buyers ," Chang
"The NHBA's stand is that developers must have
sufficient funds to be serious players in the housing industry,"
said committee member Brig-Jen (Rtd) Datuk Goh Seng Toh.
"Under the scheme, financial institutions will
provide housing loans only to projects which are viable,
irrespective of the size of the company," Goh said in response to
concerns that small developers would lose out due to the lack of
financial capability to build first and sell later.
On fears of an increase in housing prices due to
low supply, Chang said the safeguard of owning a completely built
house would override any price hike.
Acknowledging that the scheme was probably too big
a change, the NHBA has proposed a variant to the "build-and-sell"
concept, where buyers pay 10 per cent upon signing the sale and
purchase agreement as down payment to be held in trust by either the
buyers' or vendors' lawyers.
Thus, the developers will have less reason to
abscond as they will have no access to the money and buyers will
only have to pay the balance of the purchase price once the house is
completed and the title and certificate of fitness for occupation
have been issued.
"Developers are assured of the number of buyers
who have paid the down payment and can concentrate on building good
quality homes and delivering them on time.
"Buyers, on the other hand, are not exposed to the
risk of sub-standard workmanship, late delivery or abandonment,"
The NHBA is also willing to have an open debate, chaired by the
Housing and Local Government Minister, with the Real Estate and
Housing Developers' Association (Rehda), financial institutions and
the relevant organisations to iron out any problems.
"Nothing has been done since Nov 7, 1991 when we
had the two-day seminar on the `build-and-sell' scheme.
"Now, we are urging everyone involved to discuss
the matter further."