Enforcement remains the key
THE National House Buyers
Association (HBA) lauds Minister of Housing and Local Government Datuk Seri
Ong Ka Ting for boldly putting in place amendments to housing legislation,
reported in "Three Bills a boon for home buyers" (NST, Dec 25). We are
thankful to the minister for his sensitivity to the plight of house buyers
and his continuing search for remedies and adoption of pre-emptive measures,
knowing the state of affairs of the housing industry.
Having said that, we would also
like to express some of our concerns. We have repeatedly stated that any law
is only as effective as its degree of enforcement. To enact all these Acts
in Parliament and to sit back and expect the industry players to tow the
line whereby house buyers' rights and interests are protected, is a naive
The ministry should now back it
up by serious enforcement. Stricter enforcement and custodial sentences
against errant developers will help clean up the industry.
But has the "cure-all" formula
for the consumer finally arrived?
For what it was worth, the
original Housing Development Act was brought into existence in 1966, and
amended several times including the 2006 amendments.
But look at the problems house
buyers still face.
The crux of the problem lies in
the system of delivery, ie. the sell-then-build system. Buyers are totally
exposed to the business risks of developers and left at their mercy. This is
the key reason why the government has to enact laws in its attempt to
"protect" house buyers.
Yet, looking at the number of
abandoned projects and the number of house buyers who are suffering various
degrees of financial hardship, we surmise that no amount of legislation
would totally eradicate the problems cased by wayward developers.
When a housing project fails, the
buyers are in a fix. Unfortunately, no amount of legislation can guarantee
the success of any housing project; or, for that matter, any business
venture. And since the success or failure of any housing project cannot be
guaranteed by any party, it is only fair for the people to expect the
government to institute a system that totally, or to a large extent,
insulates house buyers from such business risks and uncertainties.
One such system is the
Build-then-Sell variant, the so called 10-90 system.
In June last year, the deputy
prime minister announced that the 10-90 mode of house delivery would be
allowed to co-exist with the long-practised sell-then-build mode. He even
announced the various incentives that the government was offering to housing
developers who would adopt the 10-90 mode.
Nevertheless, it still remains an
option, and if industry players are not prepared to reform, then there is
nothing the government can do under the present legislation.
Soon the various mechanics to
facilitate the 10-90 mode of house buying and selling will be put in place
by the Ministry of Housing. It will be interesting to see if the builders
are prepared to accept the incentives and to adopt the 10-90 mode of
delivery, now that they are given a choice, with incentives.
The HBA has even suggested to the
government to offer those participating developers more incentives in the
form of tax structures, rebates and easy foreign labour recruitment. We hope
this will be the beginning of a road map to compel developer to adopt this
system mandatorily with a long-term view towards an absolute build-then-sell
Brig-Gen (R) Datuk Goh Seng Toh
Vice-President, National House Buyers Association