Still paying for unfinished
16/12/2005 The Sun
The DEBATE is still raging whether we should "Pay then build" or "Build
first then pay" for property development .
Like many other property buyers, I too suffered when the developer of 478
units of industrial factories in Subang Mewah at Subang Jaya left the
project unfinished right after the economic downturn in 1997. The developer
has taken 95% in progress payment through our bank for the project. But he
surrendered the industrial factories to the lalang in February 1998.
My bank couldn't care less when I informed it that the property was
abandoned. It wanted my installment of RM3,200 a month. That's what it has
been collecting from me.
And to my horror, I was informed by the bank that I still owe RM273,000!
That is more than the original loan sum of RM247,000. The price of the
property I bought was RM298,000. I asked myself, when am I ever going to
finish paying the bank?
The story didn't end here. Along the way, my two partners who are also my
dear brothers, ended up quarrelling. No matter how thick our brotherhood
was, an abandoned project like this is good enough to destroy it.
My story is just one of the hundreds of thousands of sad stories ordinary
folk suffer whenever an irresponsible developer runs away.
I have a friend whose wife has left him and another who died, perhaps out of
grief. Many couldn't pay the installments and lost their unit(s) to
Danaharta and had their names blacklisted.
And there are many more sad stories if you are willing sit down and listen.
Your tears will fall if we describe in detail the pain we have endured due
to this unjust action not of our doing.
We used our hard-earned money to buy our dream property. But what we got was
"unsolvable problems and more hutang (debt)".
It is evident that our legal system in this area is weak.
There is a big loophole that needs to be fixed urgently, when a developer
can take our money, but instead of using it to pay for the construction
work, channels it for other uses. And when the money is gone, the developer
abandons the project. Then thousands of innocent people suffer.
There are basically three suggestions on ways to solve this problem:
Continue to pay 10% deposit to
the developer. Then pay the balance 90% as the property is being built.
(which is commonly practised now);
Pay 10% deposit to the
developer and the balance 90% to the lawyer as a stake holder. He releases
the funds as the construction progresses; and
Pay nothing until the house is
fully built and issued with CF.
I would suggest that we
completely strike off suggestion No. 1. We have suffered enough. This system
has been proven unreliable.
Suggestion No. 2 should be struck off too. Some lawyers are no better than
crooked developers. No offence to the lawyers, but kindly don't interfere.
Somehow, I think it is better for us to pay for the house after it is fully
Recently, some developers warned that the build-then-sell way may result in
higher property. They even put fear in us that prices might be beyond our
reach. That made me laugh.
The law of nature says water will find it own level. Whatever the price,
competition will set in and the market will find its rightful price. Build,
then pay has been practised worldwide.
Why can't we do the same?
And in my case, I would like to have my brothers back rather than the
See, these developers don't know what suffering is. All they care about is
Here's a piece of free advice to those developers who do not have the
financial means to construct the property before selling. I would strongly
recommend that they leave the industry and get a real job.
Victim of Abandoned Project