Review building by-laws to protect buyers: Liew
Published on: Wednesday, June 22, 2016
Kota Kinabalu: It is time to review the building by-laws in the State to protect the interest of buyers after the High Court on Monday granted a winding-up order on Sagajuta (Sabah) Sdn Bhd, which means the developer will be unable to complete its already delayed 1Sulaman Condominium project.Api Api Assemblywoman Christina Liew said the existing laws are inadequate to protect buyers in the event of a failed project."Perhaps the Government should add into the current by-laws stating that at least some percentage of the project must be built up first before they are allowed to sell. For example, 50 per cent build up," she said during a press conference here, Tuesday.
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Liew added that it is also a good idea to come up with ways to have the whole project insured, so that insurance companies will be able to cover any additional costs if developers had to be replaced because of their inability to complete the project.The 1Sulaman Condominium project, which was the centre of concern after the winding-up order, has about 1,600 purchasers for the two-block condominium, many of them first time homebuyers who took out loans to buy their units.The project was started in 2009 and supposed to have completed in 2012 with vacant possession to the buyers. However, the project almost came to a stop since 2011 with only 80 per cent and 30 per cent completed on the two blocks.
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In view of the winding-up order, it is likely that all of the company's accounts will be frozen and all activities stopped immediately unless and until the developer is able to get a stay order.Other than the 1Sulaman Condominium, the company also developed the 1Borneo Shopping Mall, 1Borneo Condominium and Hotel Complex in Inanam.
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"I have been receiving many calls from lot owners expressing their concern on the units they have purchased. What will happen to their units? Remember that many of the homebuyers have been paying the loans to the bank while at the same time, paying rents for their accommodation," she said.She urged the Local Government and Housing Ministry to intervene in the housing project and to render its assistance in helping out the unit purchasers immediately and hoped the process of appointing a new developer will take place as soon as possible.In March, the Ministry was reported to have stated that it will appoint a new developer to take over the project upon receipt of the winding-up order by the High Court.Liew said under this kind of circumstances, normally an assignee is appointed who will be responsible to continue the work using the balance of the purchasers' loan. She also expected the Housing Controller to be holding some money as well."However, we need to remember that the construction cost has increased significantly. When the project was first started, the price was lower and the purchasers were sold at certain prices which corresponded to the building cost at the time."Now, four years later from the time the project should have been completed, the construction cost is no longer the same. We are looking at an increase of up to 30 or even 40 per cent."The question is, who is going to absorb this? Don't expect the new developer to incur losses because they are also doing business. Does that mean the purchasers will have to fork out the differences? Is that fair?" she said.Consequently, she said, due to lopsided building by-laws, it is the purchaser who will always be at the losing end when developers could not deliver.Liew expressed her frustration that despite having raised the issue several times in the State Legislative Assembly, the Government had stood its ground stating that the current by-laws are adequate.Stay up-to-date by following Daily Express’s Telegram channel.
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