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State in a bind over legal action on errant developers
19/06/2008 The Star

Iskandar: Under the Housing Developer Act (Enforcement and Licensing) 1966, the minister could order the developer to get advice from a third party on how to implement a project.

THE Selangor government has no legal authority to take enforcement action against errant developers in the state.

According to Selangor state housing, building management and squatter committee chairman Iskandar Abdul Samad, only the Housing and Local Government Ministry has the right to impose and enforce legal terms and conditions on the developers.

“Under the Housing Developer Act (Enforcement and Licensing) 1966, the minister could order the developer to get advice from a third party on how to implement a project,” he said.

“The minister could also, without having to refer to the Finance Ministry, repossess any project deemed necessary to be surrendered to a third party to be revived,” Iskandar said.

“However, so far, there is no project that has been repossessed using this law,” he said.

Iskandar said that when an abandoned project needed to be revived, the state government had to deal with demands from the new developer before it agreed to revive the project.

He said the bargaining included discount on the premium and quit rent owed by the previous developer.

Iskandar said the state government could consider allowing the developer to make payments owed in instalments but would not subsidise the projects.

“If they want to take over the project they have to come up with their own money,” he said.

Iskandar said a special task force had been set up by the state government to handle the abandoned housing projects.

The team would monitor the situation of the abandoned projects and seek the solutions for the problem.

The task force is headed by Hulu Klang state assemblyman Saari Sungib and comprises state assemblymen, state officials and experts in the field.

“Currently the task force has identified 31 projects that we are studying to see whether they could be revived or not,” Iskandar said.

“If a project could be revived, we will take the initiative to get it done,” he said.

Iskandar said the team would also meet with the banks to discuss the possibility of freeing an abandoned projects to a third party to revive it.

He said 10 developers had agreed to help revive these projects, and each of them would be assigned three to four projects to work on.

Iskandar said that reviving the abandoned projects was not an easy task as it involved various parties and not all projects could be saved.

He said most of the developer companies had been declared bankrupt and many of them simply could not be traced.

Iskandar said that it would be easier to just buy over a liquidated company and take over the project.

“But most of these projects have been abandoned for quite sometime and we have not been able to trace the developers,” he said.


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