Woes that cannot be abandoned
AT YOUR SERVICE
By DATUK AHMAD KABIT
ahmadkabit@kpkt.gov.my
Moves to reduce the number of abandoned housing projects have been established by the Housing and Local Government Ministry through the National Housing Department.
PRIVATE abandoned housing projects have brought substantial adverse and profound implications to house buyers and the Government.
The Housing and Local Government Ministry (MHLG) through the National Housing Department (NHD) have instituted several initiatives to reduce the number of private abandoned housing projects.
Most of the abandoned housing projects are a result of mismanagement, mismatched development components, wrong creation and fraud by the housing developers.
As of June 30, 2010, there are 423 problematic private housing projects that are being monitored by MHLG in peninsular Malaysia compared to the 2,175 projects, which are progressing well.
From the said 423 projects, 41 (9.7%) have been declared delayed, 231 (54.6%) ailing and 151 (35.7%) abandoned. We have formed labs to work on a new mechanism to minimise failures of housing projects.
Further, from proposals that emanated from the Special Task Force to Facilitate Business (Pemudah), we formed a Special Task Force to Revive Abandoned Housing Projects.
This task force is headed by the Chief Secretary to the Government with committee members comprising senior government officials from the relevant government agencies as well as key private sector personnel, who are stakeholders in the local housing industry.
The task force has been instrumental in reducing the number of abandoned projects as well as reviewing policies, laws and regulation in relation to housing projects.
This year alone, we reduced the number of abandoned projects by 30, meeting our set target. This, however, does not entirely resolve the problem of careless developers.
In taking those responsible to task, MHLG has implemented stiffer action by compounding and prosecuting errant developers.
In 2009, a total of 586 notices of compound were issued to 545 developers for various offences ranging from failure to submit progress reports under section 7(f) of the Housing Development (Control & Licensing) Act 1966 [Act 118], failure to submit audited financial reports under section 7(e) of Act 118 and other related offences.
Between 2005 and 15 May 2010, the amount of compounds collected by the MHLG amounted to RM6,665,800.
Besides this, a total of 1,185 cases were registered in court for prosecution of offences under Act 118 such as undertaking housing projects without a license, failure to comply with the award from the Tribunal For Homebuyers Claim, failure to pay the compound and other offences committed under Act 118.
In addition to the compounding and prosecution, MHLG has blacklisted errant developers. As of May 30, 2010, 983 companies and 3,676 members of the Board of Directors were blacklisted.
The blacklisting was carried out due to reasons such as housing developers who are involved with abandoned housing projects, those who failed to comply with the award from the Tribunal For Homebuyers Claim and those who failed to pay the compound for the offence committed.
It was also done for developers involved with the ailing projects and those who had been convicted of an offence under Act 118 with a fine of more than RM10,000.
The MHLG has also established mechanisms for the monitoring and enforcement of housing projects delayed, ailing and abandoned.
Among the monitoring mechanisms that have been implemented included the developer must submit a progress report two times per year or at a frequency to be determined by the Controller of Housing in accordance with section 7(f) of Act 118, increased visits to the project sites and premises for projects that have been identified as problematic projects.
Developers must also submit audited annual financial report to ensure that accounts of the developer and the Housing Development Account (HDA) are correctly and properly maintained besides meeting with default developers to identify problems and solutions.
We are taking action to strengthen the effectiveness of existing enforcement and monitoring mechanisms such as improving the reporting of 7(f) under Act 118 with additional information by providing financial details of the HDA transactions.
In addition, the frequency of reporting the progress of the projects would be increased from two times to four times a year.
The developer is also required to provide an additional report, which is related to the work schedule of the project and the projected cash flow.
Some initiatives undertaken include visiting project sites within two months after the license is issued to housing developers for early monitoring, taking action against professionals such as lawyers, auditors, architects, engineers and others who have committed offences under Act 118 and displaying statistics and the status of abandoned housing project on MHLG’s website periodically for the buyer’s information and awareness.
By DATUK AHMAD KABIT
ahmadkabit@kpkt.gov.my
Moves to reduce the number of abandoned housing projects have been established by the Housing and Local Government Ministry through the National Housing Department.
PRIVATE abandoned housing projects have brought substantial adverse and profound implications to house buyers and the Government.
The Housing and Local Government Ministry (MHLG) through the National Housing Department (NHD) have instituted several initiatives to reduce the number of private abandoned housing projects.
Most of the abandoned housing projects are a result of mismanagement, mismatched development components, wrong creation and fraud by the housing developers.
As of June 30, 2010, there are 423 problematic private housing projects that are being monitored by MHLG in peninsular Malaysia compared to the 2,175 projects, which are progressing well.
From the said 423 projects, 41 (9.7%) have been declared delayed, 231 (54.6%) ailing and 151 (35.7%) abandoned. We have formed labs to work on a new mechanism to minimise failures of housing projects.
Further, from proposals that emanated from the Special Task Force to Facilitate Business (Pemudah), we formed a Special Task Force to Revive Abandoned Housing Projects.
This task force is headed by the Chief Secretary to the Government with committee members comprising senior government officials from the relevant government agencies as well as key private sector personnel, who are stakeholders in the local housing industry.
The task force has been instrumental in reducing the number of abandoned projects as well as reviewing policies, laws and regulation in relation to housing projects.
This year alone, we reduced the number of abandoned projects by 30, meeting our set target. This, however, does not entirely resolve the problem of careless developers.
In taking those responsible to task, MHLG has implemented stiffer action by compounding and prosecuting errant developers.
In 2009, a total of 586 notices of compound were issued to 545 developers for various offences ranging from failure to submit progress reports under section 7(f) of the Housing Development (Control & Licensing) Act 1966 [Act 118], failure to submit audited financial reports under section 7(e) of Act 118 and other related offences.
Between 2005 and 15 May 2010, the amount of compounds collected by the MHLG amounted to RM6,665,800.
Besides this, a total of 1,185 cases were registered in court for prosecution of offences under Act 118 such as undertaking housing projects without a license, failure to comply with the award from the Tribunal For Homebuyers Claim, failure to pay the compound and other offences committed under Act 118.
In addition to the compounding and prosecution, MHLG has blacklisted errant developers. As of May 30, 2010, 983 companies and 3,676 members of the Board of Directors were blacklisted.
The blacklisting was carried out due to reasons such as housing developers who are involved with abandoned housing projects, those who failed to comply with the award from the Tribunal For Homebuyers Claim and those who failed to pay the compound for the offence committed.
It was also done for developers involved with the ailing projects and those who had been convicted of an offence under Act 118 with a fine of more than RM10,000.
The MHLG has also established mechanisms for the monitoring and enforcement of housing projects delayed, ailing and abandoned.
Among the monitoring mechanisms that have been implemented included the developer must submit a progress report two times per year or at a frequency to be determined by the Controller of Housing in accordance with section 7(f) of Act 118, increased visits to the project sites and premises for projects that have been identified as problematic projects.
Developers must also submit audited annual financial report to ensure that accounts of the developer and the Housing Development Account (HDA) are correctly and properly maintained besides meeting with default developers to identify problems and solutions.
We are taking action to strengthen the effectiveness of existing enforcement and monitoring mechanisms such as improving the reporting of 7(f) under Act 118 with additional information by providing financial details of the HDA transactions.
In addition, the frequency of reporting the progress of the projects would be increased from two times to four times a year.
The developer is also required to provide an additional report, which is related to the work schedule of the project and the projected cash flow.
Some initiatives undertaken include visiting project sites within two months after the license is issued to housing developers for early monitoring, taking action against professionals such as lawyers, auditors, architects, engineers and others who have committed offences under Act 118 and displaying statistics and the status of abandoned housing project on MHLG’s website periodically for the buyer’s information and awareness.
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