Malaysian Time

Rogues exposed

By G. Umakanthan I

n a move welcomed immediately by the National House Buyers Association, the Housing and Local Government Ministry four days ago posted on its website (www.kpkt.gov.my) lists of housing developers who have run foul of the law.

The lists, presently only available on the site’s Bahasa Malaysia version, detail five categories of contravention of the Housing Development (Control & Licensing) Act 1966 (HDA) and the regulations under it.

The first list names 15 developers that did not comply with awards handed down by the Tribunal for Homebuyer Claims up to September this year. They have been prosecuted in the courts, but no further details are provided.

The second list names two developers, both with the same address at Kompleks PKNS in Shah Alam, Selangor, against which a total of 18 cases will be heard at the Sessions Court in Shah Alam from Feb 13 to 15 next year.

The charges against these two companies come under Section 5(1) and (2) of the HDA, which concern the carrying out of housing development without a licence and using the term “housing developer” without the written consent of the Controller of Housing.

In the third list, three developers and the director of one of these companies named face action in magistrate’s courts between November this year and March next year. Their offences include failing to provide information sought by the Controller, acting as director of a housing development company without the written consent of the minister and making a misleading or false statement in the application for the advertising and sale permit.

The fourth list names 213 developers that have been fined RM1,000 each between 2003 and Septem-ber this year for breaching conditions or restrictions related to advertising in their housing development licences. Among them are a number of well-known developers.

The fifth list reveals 304 developers, prominent companies included, that have been fined RM10,000 each, also between 2003 and last month, for failure to submit biannual reports on the progress of their developm

Most abandoned houses in Selangor

By P. Rajan

Despite stringent guidelines governing the housing industry and increasing public awareness about problems associated with housing development, cases of abandoned projects continue to be a bane of the industry, albeit on a declining trend.

For the whole of 2004, a total of 227 housing projects were abandoned in Peninsular Malaysia, according to figures released by the Monitoring & Enforcement Division of the Ministry of Housing and Local Government.

Selangor contained the most number of abandoned projects at 55, or 24 per cent of the total, worth about RM2.4 billion or 33.7 per cent of the total value of the abandoned schemes.

However, this should not come as a surprise, considering the significant number of housing projects implemented to meet the needs of a growing population attracted by the opportunities in the State.

According to reports compiled by the ministry as well as the National House Buyers Association, the main reason given by developers for abandoned projects over the years has been “cash flow problems”.

Other States with a comparatively higher incidence of abandoned projects include Penang with 24 projects (11 per cent), Negeri Sembilan 22 (9.7 per cent), Pahang 21 (9.2 per cent) and Johor and Perak each with 19 (8.4 per cent).

Although the Federal Territory of Kuala Lumpur accounted for only 18 abandoned projects, it was the second highest in terms of value, at RM2 billion or 28.8 per cent of the total.

In general, the abandoned projects captured in 2004 consisted of 75,356 housing units with an estimated value of RM7 billion. Most of them were at different stages of completion.

A silver lining in the cloud is the number of projects with potential to be revived, which has steadily risen since the 1997 Asian economic crisis.

From a low of 43 projects in that year, it rose to 121 in 2004, registering an average growth of 20 per cent per annum over the last six years. This is in tandem with the rising economic prospects during the period.

As a result, a total of 1,948 housing projects with a total estimated value of RM20 billion were successfully rehabilitated between 1997 and 2002.

- Property Times 12 November 2005 issue -

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The recent move to extend the visa duration for participants of the Malaysia: My Second Home programme from five to 10 years has been lauded by the Real Estate and Housing Developers’ Association Malaysia (Rehda).

The new policy, which will take immediate effect, was one of the recommendations the association made to the Government during the Budget Consultation 2006, its president Datuk Jeffrey Ng said.

With a 10-year multiple-entry visa, participants of the programme are likely to be more optimistic about wanting to purchase their own residential properties. The new policy is also expected to engender greater confidence among expatriates contemplating long stays in the country.

As a result, Rehda also expects demand for residential properties above RM150,000 to be buoyant.

Another proposal it has made to the Government is a “Business Migration Programme” (BMP) to allow foreigners doing business in the country to stay for up to 10 years.

The proposal targets high nett worth individuals keen on establishing and operating new businesses or on taking direct equity investment in existing businesses in Malaysia. Rehda anticipates an increase in demand for residential and commercial properties as well as spin-off businesses should this proposal be accepted.

It believes that by targeting at least 1,000 eligible business migrants under this proposal, RM3.75 billion worth of investment flow can be generated.