Kuala Lumpur, Sun, - Many who have invested in homes only to find later their housing projects abandoned fervently support the proposed 'build and sell' concept.

Ranjit Singh, a victim of an abandoned housing project, said all home buyers should support the concept because it would prevent developers absconding with their money before completing their project.

In 1999, he and his wife Catherine applied for a flat through Kuala Lumpur City Hall. They were recommended a project in Taman Setapak Jaya on a piece of land owned by City Hall and developed by a private company.

They signed a sale and purchase agreement in February 1999 which stated that the flat would be ready in three years.

"We believed nothing could go wrong because it was City Hall land. But after three years, when the project was 80 per cent complete, it was abandoned.

"Five years later, I do not see light at the end of the tunnel despite assurances from the Housing and Local Government Ministry and the House Buyers Association (HBA) that they are doing their best."

At a recent meeting of the buyers with representatives from the developer, City Hall, the ministry and HBA, he said they were told the developer had arranged to complete the project by 2006 but Ranjit said he had lost all confidence of ever being able to move into his flat.

According to the ministry's website, more than 80,000 buyers have fallen prey to over 540 abandoned projects in the country worth RM9.5 billion.

Consumers and the industry have had mixed reactions to the "build and sell" concept proposed by Prime Minister Datuk Seri Abdullah Ahmad Badawi in May.

Housing and Local Government Minister Datuk Seri Ong Ka Ting said on July 3 that his ministry was preparing a report on the concept for the Cabinet, outlining the advantages and disadvantages and including feedback from various parties.

Construction Industry Development Board (CIDB) general manager Abdul Latif Hitam said the "build and sell" method could weed out unscrupulous developers and improve quality, as purchasers can check the workmanship before paying.

"We could promote "build and sell" through the use of the Industrialised Building System (IBS)," Latif added.

The IBS, a pre-fabrication system in which parts of the building are mass-produced in a factory and then assembled on site, could save time, cut costs and reduce the number of workers on site, he said.

Asked to comment on the "build and sell" proposal, Real Estate and Housing Developers Association president Datuk Jeffrey Ng Tiong Lip said Malaysia's economy and state of development was not mature enough for the concept.

He said the developers would be unable to meet the need for 100,000 to 150,000 new units per year if the concept was adopted as construction needs the financial resources of both developers and buyers.

HBA committee member Datuk Goh Seng Toh said house buyers should not risk losing their money when a project fails.

"Very few developers use their own funds, even if they are cash-rich. They prefer to spread their risk through bridging loans. And if they have no resources, they shouldn't be be in the business anyway because there is a higher chance they'll have financial difficulties," he said.

The Housing and Local Government Ministry has asked for HBA's views on 'build and sell". The body will submit a paper in early July.

Under the present system, a buyer pays 10 per cent of the sales price after signing the sale and purchase agreement and then makes progress payments based on the stage of completion.

As developers are not ready to fully implement "build and sell", Goh suggested an "intermediate" system until they are ready.

"Once the developer has the licence, the housebuyer can pay about 10 per cent and this can be held by the lawyers, who will put it in a fixed deposit with interest," he proposed.

After that, the buyer does not pay anything else until the house is completed.

Meanwhile, the developer will seek bridging loans from banks.

"When the house is ready and the certificate of fitness is issued, the buyer can be given three months to pay the remaining 90 per cent," Goh said.

HBA also recommends that banks give bridging loans to developers rather than end-financing to buyers.

"The banks will have full control of disbursements and will be ultra-cautious because it is their own money," said Goh. - Bernama