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Laws in place but developers not brought to book, says group
Published on: Tuesday, July 26, 2022
By: Robin Augustin, FMT
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A consumer group says developers who abandon their projects could be jailed for up to three years.
PETALING JAYA: An MP’s call to blacklist developers who cannot finish housing projects will do little to fix the problem, says a consumer group.

National House Buyers Association secretary-general Chang Kim Loong said there were enough stringent rules and safety nets to protect the rights and interests of house buyers affected by delays in projects.

“The main problem is that these rules do not appear to have been enforced. And that is down to the authorities’ willpower. If they have (enforced the rules), it hasn’t been reported in the press to show the ministry’s seriousness,” Chang told FMT.

“So long as the rules are not enforced, this problem will never be solved.”

Chang said the law provides a penalty of up to three years’ jail and a fine of up to RM500,000 or both for those who abandon projects. Developers are also required to put down a deposit of 3% of the development value to deter them from abandoning their projects.

Chang said if the government was intent on pursuing the blacklisting idea, it would be more effective if members of the developer’s board of directors were also blacklisted

“It is common practice for developers to set up separate subsidiaries for every project, so just blacklisting the company won’t help much,” he said.

He was commenting on Pontian MP Ahmad Maslan’s call for the government to blacklist developers that failed to finish their projects on time, and take them to court.

Former deputy housing and local government minister Raja Kamarul Bahrin Shah said the ministry needs to be more aggressive in protecting consumers.

“House buyers should not be made to suffer because of a developer’s inability to complete their projects on time,” he told FMT.

Raja Kamarul said the ministry must be proactive in taking action against developers who are behind schedule, including sending them warning letters.

“Most sales and purchase agreements (SPAs) have adequate provisions to ensure the rights and interests of house buyers are protected and that there are remedies for delays.

“The issue is the lack of follow-through action by the ministry which is supposed to enforce the provisions contained in the SPA.”

Raja Kamarul said the threat of blacklisting could send a strong warning to developers but the government must ensure action is actually taken.


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