Penalising shareholders in abandoned housing projects
NST 10/09/2004

THE action to blacklist developers who left buyers in the lurch when their projects are abandoned may be extended to major shareholders of the companies.

The Housing and Local Government Ministry has already blacklisted the board of directors of errant companies from applying for new development licences.

Its Minister Datuk Seri Ong Ka Ting said as those blacklisted could circumvent the ban by using proxies, the ministry might soon make it compulsory for licence applicants to declare that they were not acting on behalf of other people.

"In future, applicants may be required to make a statutory declaration that they are not acting as proxies. Those who lie will be dealt with severely," he said at the Parliament lobby.

He was elaborating on his reply to Datuk Badruddin Amiruldin (BN-Yan) in the House on action against housing developers who failed to complete their projects.

However, Ong did not state how many companies and directors had been blacklisted.

He said the board of directors could also be blacklisted for not honouring awards handed down by the Tribunal for Homebuyers' Claims or ignoring complaints from buyers.

He said from 1990 until June this year, the Government had approved the construction of 10,553 housing projects.

"Of these, 199 were later abandoned but 77 have since been revived. Of the remaining 122 projects, eight could not be saved while 15 have been taken over by other developers."

Earlier in the House, responding to a query on the system to replace the Certificate of Fitness for Occupation, Ong said it should not be viewed as removing the protection for buyers.

"The new system will reduce bureaucracy while ensuring that all regulations are adhered to," he said.

Tentatively called the Certificate of Completion and Compliance (CCC), the certification will be issued by engineers or architects in charge of the projects.

To the original question by Wong Nai Chee (BN-Kota Melaka), Ong said the "build, then sell" concept was still being studied, with the findings expected to be presented to the Cabinet before year end.

He said some developers were already practising the concept but it was restricted to high-end properties.

Responding to Hamim Samuri (BN-Ledang), Ong said engineers and architects found abusing the CCC system risked severe penalties, such as under the Street, Drainage and Building Act where offenders could be jailed up to 10 years and fined RM500,000. He said discussions were being held with the relevant bodies, including the Real Estate and Housing Developers Association and the National House Buyers Association, on the new system.