Housebuyers bear the brunt of developers’ folly

I think the Government really have to look into this matter. It is pitiful for house buyers to be left in a lurch like this. For all the promises to safeguard house buyers with so many rules, they always fall short when these things actually happen.

It's good for The Star to bring this matter up but will it again end of nowhere? 

Below is the article in full.

The Star, Tuesday June 7, 2011 

Housebuyers bear the brunt of developers’ folly 

A recent report by the Kajang Municipal Council (MPKj) revealed that there are 11 abandoned projects within the municipality and three housing projects without Certificates of Fitness (CF). 

IMAGINE waiting for over 20 years to move into your dream house only to find out that the developer has pulled a Houdini act. 

The council received the information from the Selangor Housing and Property Board (LPHS). There are several factors associated with these kind of problems — the most common being money.

Left idle: A housing project in Taman Padang Tembak, Kajang, with 20 abandoned units and nine others 90% completed.

Others include land status (one project was built on agricultural land) and no building plans submitted. In some cases, the developers cannot be contacted.

One of the projects, supposedly to be built in Taman Ilham Perdana Sejoli, Hulu Langat, cannot even be traced by MPKj officers.

A buyer — Albert Loh — bought a unit in Kajang Villa along Jalan Reko in 2001. He said for the first two years, construction work was going on smoothly but it stopped in the third year.

No papers: A housing project without CF near Taman Megah and Taman Maju Satu, Kajang.

 

When StarMetro visited the site, the apartments looked as if they were completed from the outside. However, the interior revealed otherwise.

“The developers claimed they encountered financial problems,” said Loh.

“We sought help from politicians and the issue has received media coverage but to no avail.

“We want the property to be completed as soon as possible. The new developers who took over the project said they would start work soon,” Loh added.

“Currently, we are still waiting for the new developer to start work. We hope the bank can stop charging us interest, which is RM600 per month. So far I’ve paid over RM70,000.”

Next door: People are living next to the abandoned project in Batu 14, off Jalan Cheras.

 

One of the oldest projects recorded is in Taman Lingkaran Nur where terrace houses were supposed to be built.

An abandoned project in Batu 14, off Jalan Cheras is blocked from “public view” by the thick foliage. To make matters worse, there’s no way of getting to the place as there is no access road.

A former worker from Indonesia who identified himself as Mais has been living near the project for eight years.

A permanent resident, Mais worked as a clerk for the developers before it went bust.

“When the project started, we rented the access road but now that the term is up, the owner of the access road has turned the area into a used car garage, hence there is no access from the main road.

“The project ceased when the developer encountered financial problems. The owner of the company died some time later. They still owe me RM30,000 in wages,” he said.

MPKj councillor Lee Kee Hiong raised the issue during a recent full board meeting and urged the relevant departments to look into the matter.

“The Selangor Housing and Property Board (LPHS) has identified 11 abandoned projects in Kajang.

“Buyers of properties in the identified projects can complain to the KPKT (Housing and Local Government Ministry),” she said.

Council president Datuk Hassan Nawawi Abdul Rahman said projects where the developers went bankrupt will be reported to the KPKT.

“We can take action against those who violate the bylaws relating to licensing and infrastructure.

“Developers who carry out work without a Planning Approval can be fined up to RM500,000. We can help out developers who take over abandoned projects,” he said.

According to an officer from the KPKT’s unit specialising in abandoned projects, property buyers can check via its website (www.kpkt.gov.my) if the company is blacklisted or has caused projects to be abandoned.

“The Monitoring Unit will conduct checks on projects to determine if it is ‘sick’ or abandoned. It will be handed to us if it is certified as an abandoned project. We will then go for a site visit to find out information on the project. We will be the mediator between developers interested in salvaging an abandoned project.

“For developers that have been placed under receivership, we will work with the liquidator,” he said.

The Ministry has a way to ensure that blacklisted company owners do not set up another company under another name.

“We will blacklist the board of directors. Unless they complete the project that they have abandoned, they cannot set up another company,” he said.

KPKT has identified three categories of problematic projects:
·Late Projects — Projects that are carried out 10% to 30% later than the supposed progress;

·Sick Projects — Projects that are more than 30% late than the supposed progress and which its S&P has expired;

·Abandoned projects — Projects that are not completed within the S&P period and no visible activities at site for six months continuously, the company has been placed under receivership; when the developer admits in writing to the Housing officer of not being able to continue the project; and when Ministry has certified that it is an abandoned project under Section 11 (1) (c) Act 118.

For details, visit www.kpkt.gov.my/kpkt/

Until the next time, cheers.