Protection for house buyers
19/08/2006 By CAP

WE have advised you on your rights should you end up with a defective house. However, we have not got to the root causes of defective houses which is the practice of the sell-then-build system, and the inherent weaknesses in the Housing Development (Control and Licensing) Act (HDA).

The following recommendations are made in the interest of all house buyers:

Full commitment to build-then-sell
With the Government’s recent approval in the implementation of the “build-then-sell” (BTS) concept, certain projects will be built first before they are sold. House buyers will have to pay a 10% down payment and the remainder will be settled upon the completion of the house.

According to news reports, the BTS will be reviewed after two years.
This is not good enough. The Government should be fully committed to the BTS by insisting that it will be the norm after two years as any problems with its implementation will have been worked out by then.

The Ministry of Housing and Local Government is fully aware of the problems faced by house buyers under the present “sell-then-build” system.

It announced in October last year that there were close to 700 rogue housing developers, including 16 bogus builders detected in a nationwide crackdown. How many victims have these unscrupulous developers claimed?

Therefore, the Ministry must be committed in replacing the present “sell-then-build” system with BTS.

Currently licences are not granted to developers who have been fined for an amount exceeding RM10,000 or imprisoned.

That amount should be reduced to RM5,000, then there will only be genuine housing developers who are interested in looking after the interests of house buyers.

The limitation period in which a house buyer can bring a claim to the Tribunal should be increased to six years in accordance with the Limitation Act 1953 in relation to contractual claims.
This would allow house buyers to have a swift hearing within the Tribunal system.

Make directors and shareholders personally liable towards buyers when they abscond, abandon housing projects or when the companies are wound up.

Give buyers in Sabah and Sarawak the same protection that buyers in Peninsular Malaysia enjoy under the HDA.

Make it mandatory for developers to include additional facilities in brochures and advertisements in agreements.

When developers refund monies to buyers, it should be with interest and not free of interest.