Staying clear of rogue developers

22/10/2205 NST-Prop  By Suzie Low, Kuala Lumpur

It comes as no surprise to the house buying public that rogue builders have been flourishing for decades. However, the revelation by the Housing and Local Government Ministry's Monitoring and Enforcement Division director Dr G. Parameswaran is probably the first time in history that actual numbers have been provided.

There would be hundreds of buyers victimized by just one rogue developer. How many buyers the 695 rogue developers have preyed on detected by the ministry? How are buyers to know if their developers are "rogues"? And how can house buyers in the future stay clear of such developers?

House buying is usually a one-off decision that many of us make. Getting caught in making a purchase from an errant developer can bring a lifetime of misery to the buyer's household.

No statistics are available yet on the financial cost to buyers as a result of a failed housing project. One example is that when a white knight is found to revive and complete an abandoned project, the buyers are often required to top up their purchase price by 10 per cent or more.

House buyers will also have to bear further expenses if developers refuse to rectify defects or delay the job.

The ministry has to do more than just announce statistics. More details should be made public, not just for buyers but also forbanks and local authorities (which approve the projects) so
that they are

aware and hill not approve any more projects until such developers have resolved their problems.

When the ministry gives a developer the licenses to advertise as well as build and sell houses, the perception of the public is that it is safe to buy from such a company. However, this is not assurance enough, for problems are aplenty: Projects continue to be abandoned. are not completed on time, defects not rectified promptly and so on.

The ministry should make available to the public a database on developers and development projects. The perfect database should contain information on all approved development projects sold through the progressive: system.

This will tighten the net on commercial project rogue developers trying to jump into residential development. Since the ministry also oversees Local Government, it will not be much to ask for this information to be tabulated.

Increasing enforcement is not the only answer.

A change in the present system of progress payment by house buyers should also be made. A good system would be the "10:90 concept" that Housing and Local Government Minister Datuk Seri Ong Ka Ting and his team went to Australia to study.

This system, I believe will weed out potential rogue developers and only allow the serious ones to succeed.