Most victims are average Malaysians trying to make ends meet and have saved every sen for the first 10% in downpayment for their own roof over their head.
Buying a house is a big-ticket item and the loan to finance the property will take many years to be repaid. It is time the whole process of owning a house becomes a pleasant experience for house buyers and their families. To ensure that happens, all stakeholders need to work towards a fool-proof housing delivery system that protects house buyers from stalled and abandoned projects.
There are weaknesses in the current housing delivery system that need to be addressed.
As far as legislations are concerned, the Housing and Local Government Ministry is working towards further tightening some “loose ends” in the Housing Development (Control and Licensing) Act. One of the important changes underway is that the deposit required to obtain a developer's licence will be raised from the current RM200,000. The quantum will depend on the project cost.
This will hopefully, weed out wayward individuals from jumping into the bandwagon of property development and ensure only genuine developers with sufficient capital outlay and reputation will remain in the business.
Another important step to safeguard buyers' interest is the need to tweak the schedule of payment in the sales and purchase agreement so that the percentage of progressive payment due to developers will be lower in the initial stages and higher as the project nears completion.
At present, prior to handover time, buyers would have paid up to 95% of the property's price and this gave them little or no bargaining power when there are unfulfilled terms as stipulated in the S&P.
The strict enforcement of the law to bring to book developers who flout the law will ensure those who are serious in discharging their duties will thrive and further lift the property landscape.
Keeping order
Developers need to walk the journey with their buyers right to the last mile and deliver their projects in good order and on time. First and foremost, they should have done all the basic groundwork of having sufficient capital outlay, a good team with the necessary technical capability, proper project planning and concept, and of course, the right location for the project.
Even in the face of difficulties, developers should not shirk their responsibilities and work towards fulfilling all the terms in the S&P contract.
Instead of absconding and not facing up to reality when their projects are faced with problems, they should seek help and be around to ensure things are in order when rescue work gets underway.
Meanwhile developers who have the expertise and know-how should step forward to lend their support as white knights to rescue stalled and abandoned projects.
Such rescue work calls for unique expertise and it will be good if a special consortium comprising the various stakeholders in the industry can be set up to rescue troubled projects.
In fact, most projects would have gone through the due diligence and feasibility studies and certified as financially viable before they can get bridging loans.
But sometimes, the unforeseen happens and most of the time, they are led by bad economic times like a recession or financial crisis.
While legislation can only do so much, the onus also lies with prospective buyers to equip themselves with the necessary information on property matters to make informed decisions.
As pointed out by a veteran developer P.K. Poh: “A buyer who is sufficiently educated in property matters will not only be a good buyer, but also a safe one.”
Deputy news editor Angie Ng hopes to see greater responsibility from all stakeholders in the property market to ensure sustainability.
By The Star
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