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Ethics lie buried in builders' accounts
The Sun 31/7/2004

I SYMPATHISE with readers who signed off as "Cheated Owners" and Jagdish Chandra whose letters were published last week.

They had discussed the problems faced by condominium and apartment buyers whose money the developers and the management companies had misused.

Most, if not all residential strata owners face the same dilemma.
The lower or cheaper the type of apartments or condominiums, the worse the problems become.

It is safe to say that nearly all (maybe 90-95%) apartments or condominiums do not have proper accounts (as required by the law), let alone have audited accounts.

Can you imagine what will happen if you have laws specifying that directors will be sent to jail for failing to have proper audited accounts for strata developments?

Our prisons will be full with company directors, including Tan Sris and Datuks from listed companies. Ironically, maybe that is the only way to make developers accountable.

To developers, profitability is all that matters.

Property management and maintenance is a waste of time and a liability. Thus, company directors tend to wash their hands off the problems and leave them to the juniors to resolve.

Even in properly maintained accounts, one can find a lot of irregularities and unethical practices even by subsidiaries of public listed companies.

In one instance, a reputable listed company is known to bill each condominium owner secretly RM50 every month for management fee.

This is unethical and morally wrong as it is the duty and responsibility of the developer under the law to provide these services, where only the expenses are passed on to the owners.

With more than 3,000 units, the developer can record profits of some RM 1.8 million a year.

But it takes an experienced and knowledgeable person with trained eyes to be able to tell what is morally and ethically right.

Can you imagine if the developer is not a subsidiary of a listed company.

Strata residential owners have no chance and are left entirely to the mercy of developers without any protection from the law.

My advice to potential house buyers is do not buy apartments or condominiums unless you are looking for headaches and nightmares arising from abandoned projects, shoddy workmanship, poor maintenance and missing funds.

It is sad but true that our property industry, particularly the strata developments have not reached a professional level where consumers' rights are adequately protected either by law or by conscience.

Jimmy Lim
Kuala Lumpur
 

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