IS the Housing and Local Government Development Ministry (KPKT) capable of monitoring and taking on the challenge of the proposed Urban Renewal Act?
The act is meant to address redevelopment, rejuvenation, revitalization and en-bloc sales among others. But with the current spate of late, sick and abandoned housing projects, have they not failed miserably in their gatekeeper roles?
The statistics speak volumes of the happenings.
The National House Buyers Association (HBA) would like to see solutions to long-standing woes – solutions that will truly lead to a better Malaysia:
– Tangible actions by the governing and licensing authority i.e the KPKT to resolve project abandonment issues instead of merely re-categorising them as delayed and sick projects before declaring them as “abandoned”
– Timely handovers of projects without cowing to the pressures and demands of industry players to grant extensions of time (EOTs) arbitrarily at the expense of denying house buyers’ rights in receiving statutory compensations for such delays
– Stricter actions to prevent defective, substandard materials and poor workmanship
– A more balanced financing system that will not burden ordinary house buyers to lifelong repayment terms with an interest rate that is higher than our average salary increment, without the possibility or ease of terminating the arrangement, even when faced with abandoned housing problems
– Deterrent controls against errant housing developers who have the habit of “scheming” to wind themselves up to avoid their contractual and statutory obligations
– Strict monitoring, supervision and enforcement of the Housing Development (Control & Licensing) Act and its regulations. There is dire need for enforcement program by KPKT
– Pre-emptive measure must be adopted and safety net must be cast to avoid future abandonment of housing projects
– The dirty feeling associated with the word “abandonment” and the beginning of the nightmare for the victims of abandoned housing projects
The government announced in Budget 2024 that it is removing the requirement for 100% consent from residents of strata properties to allow en bloc sales.
The idea is to allow gentrification and redevelopment of tired old developments.
First and foremost, residents or occupants have no say in any dissolution of stratified properties or en-bloc. The rights and entitlement rest with the owners.
HBA strongly opposes any setting of a “consent threshold”, save and except 100% participation. HBA’s stand is that any redevelopment, rejuvenation or renewal plan must receive the consent of all because every single owner is important.
No rightful homeowner should be disadvantaged in any scheme that takes away citizen’s rights.
While some quarters have viewed this proposed Urban Renewal Act as a step in the right direction, HBA reiterates this is a regressive move because it would become an unconstitutional piece of law that circumvents Article 13 in our federal constitution, which stipulates the rights to own property.
The government has pointed out that the rates for the “consent threshold” are much lower in certain developed countries. This government is making the same mistake as the previous one which takes Singapore and Hong Kong as examples to justify the enactment of this law.
HBA has explained numerous times that, in Singapore and Hong Kong, there is only leasehold land for existing buildings, and new development land is scarce on the islands.
In Malaysia, we have both freehold and leasehold land, but what is more glaring is that we have significantly more land masses compared to Singapore and Hong Kong.
The latter two were ranked as the world’s third and fourth most densely populated countries respectively while Malaysia was ranked at 46th, based on the United Nations’ data as at 2021.
While en-bloc sale is arguably a necessary evil in Singapore and Hong Kong due to the pressing need for urban redevelopment, this argument does not apply to Malaysia.
Percentages that have been touted by industry players emulating overseas countries are 90% for buildings less than 10 years old, 80% for those between 10 and 20 years old, and 75% for those above 20 years old.
In the Budget 2024 speech by the prime minister-cum-finance minister, it was declared that as of August 2023, a total number of 256 “sick projects” or more that 28,000 units of houses have been revived involving an estimated development value of RM23.37 billion.
Implementing revival process does not tantamount to success until and unless the Certificate of Compliance and Completion (CCC) has been issued and physical vacant possession have been delivered with keys and water and electrical ready for tapping to the affected owners/ victims is then deemed completion per se.
On top of that, there is still the issue of ownership papers i.e. strata titles for stratified property and title deed for landed property.
Special task force (STF) made up of failed gatekeepers?
Here, HBA’s concern is that it may be made up of the very people entrusted to license, monitor, police and enforce the Housing Development (Control & Licensing) Act and its’ regulations.
If they have failed miserably in their gatekeeping role, how can they now be entrusted to revive sick and abandoned projects?
What is crucial is a safety net to pre-empt future project abandonment. Let’s acknowledge the fact that there is no solution to abandoned housing projects – we just have to prevent it from happening.
And it’s not that we don’t have sufficient laws. Look at the current Section 7(f), Sections 10, 11 and 12 of the current Housing Development Act (HDA) legislation. What is lacking is supervision, policing and enforcement.
So, we hope the STF would not waste too much time on what has already been deliberated and worked on to pre-empt housing abandonment issues, but be truly empowered to press the reset button once and for all.
Don’t bite off more than you can chew
With the proposed Urban Renewal Development Act coming under KPKT, we fear that the legitimate current owners of their respective property, which may partake in these “schemes” may be worse off if the fate of abandoned projects befall them.
Not only do house owners suffer – the banks and the government also get burnt.
The possibilities of devastating effects are as follows:
– Bare promises of one unit in exchange for one unit, whether contractual or otherwise, means nothing if the project fails and is abandoned. The owners will surely be left in the lurch like victims of current abandoned housing projects
– Physical buildings, now erected at site, will be demolished in exchange for bare promises and a “pie in the sky”
– If the project of redevelopment falls through, what’s the use of costly and lengthy litigation in the court of law? The owner will continue to be house poorer in exchange for a dream
– Property developers, contractors or builders normally – for good administrative sense – would set up separate companies, subsidiaries or associates to undertake new projects. In law, they are separate legal entities and if they go belly up, the parent company will not be liable. The affected owners will see their dreams vapourised
– The owners who succumb to the redevelopment (under the pretext of urban renewal) would be crying and blaming the government for the misguided structured legislation for their ill-fated scheme when those developers/contractors/builder failed in their obligations
– The adage holds true: “property developers overpromise and underdeliver”
– KPKT will continue to issue developer’s licences but lackadaisical attitude towards monitoring and enforcement role, as in the current situation
Is the KPKT capable of handling the urban renewal development legislation when they have failed so miserably in their role to safeguard the buyers of housing units under the current Housing Development (Control & Licensing) Act and its HD regulation – HD (Project Account) Regulations among others?
The current adverse statistics speaks volumes of their failure and “misachievement”. How do you then account for the surmounting problematic projects?
Can the government guarantee us that there will be no abandoned and problematic projects in the future? There are clearly insufficient efforts being made to halt and cease problematic projects coming on stream which have in fact increased the statistical charts.
What more “urban renewal redevelopment” laws under the licensing, monitoring, supervision and policing of KPKT ? – January 4, 2024
Datuk Chang Kim Loong is the honorary secretary general of the National House Buyers Association (HBA)