Ministry can only play the
role of mediator in disputes
26/05/2008 The Star
SINCE 1990, only 1% of the 2.3 million units of residential properties in
the country had not been completed.
Housing and Local Government Ministry Secretary-General Datuk Ahmad Fuad
Ismail ( picture) said another 3% were delivered late.
He said a high delivery rate was achieved as most of the developers in
Malaysia were responsible, and also because they were governed under the
Housing Development Act 1966.
The law makes it mandatory for developers to submit a progress report every
six months, or face a minimum penalty of RM50,000 to a maximum penalty of
RM250,000, or three years jail term, or to both.
“Besides going through the report, we also do onsite inspections,” he said.
And if the consultant who prepared the report was found to have falsified
the details, the architect or engineer concerned would face a RM100,000
penalty or imprisonment for a term not exceeding five years, or to both.
Ahmad Fuad said it was also mandatory for developers to submit a financial
report annually, or face a maximum RM250,000 fine.
The Ministry is also empowered to freeze the account of errant developers.
“We have to act fast, because by the time we want to freeze their account,
the money would have been taken out from the account. Even the board of
directors would have changed.”
Ahmad Fuad advised buyers to do their research before purchasing property.
He said the contract is between the developer and the house buyer, and the
Ministry is not a party to the agreement.
“Anyone can be a buyer, sign the sales and purchase agreement (SPA), pay
10%, arrange for a bank loan and own a house. The Ministry is not involved.
“They don’t ask if their (the developers') business is viable or not. Buyers
are expected to know what they are doing. If they don’t know, (then) they
“Buyers come to us and ask, 'What is the Ministry doing?' But our powers are
limited (in issues relating to abandoned projects). The Ministry can only
play the role of a mediator.
We do not want to frustrate the buyers. We want to facilitate matters so
that there is a good outcome for them,” he said.