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DEC 27, 2013
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> Frustrated, tearful out-pouring from the rakyat
about a vicious problemwhich has been allowed to fester
for too long....
Pragmatic suggestions
Dr Rafick tables some pragmatic
suggestions on how government can
resolve the issue of abandoned property
projects which has “frozen” billions
of Ringgit of suffering and duped
property purchasers.
*We need a very strong muscle
taskforce, a dedicated team of people
that mean business. They should
consist of an AG, representatives from
the police, the bank/s, income tax
department, Ministry of Housing, a
state representative and
representatives from the buyers
group. We need to sit down and make
decisions on each of these
late, sick
and abandoned
projects so lives can
move on. [Problems cannot be solved
in meeting rooms, and by endless
talking without resolution/closure.]
* Take each project one by one. Study it
from every angle and decide if the
developer can be “squeezed” or
penalised. Then use the current laws
effectively to settle and resolve each
of these backlogged abandoned
project cases.
* To prevent further recurrences, S&P
agreements need to be looked into
and amended, as the current ones are
all in favour of the developer.
For the record...
PART 3
Abandonedprojects
J
UST
twowell-researched articles in
theSun
about abandoned property
projects has precipitated a cathartic
outpouring of diatribes and emotions.
We are shocked by the incessant flow
of telephone calls, emails, letters and
tearful outbursts over the past 2 weeks.
Our analysis has obviously touched a
sensitive nerve
,
exposing a serious
problem
which requires urgent
intervention by the government,
relevant authorities and even the
project-financing banks
.
Today, we are summarizing the key
issues gleaned fromour recent analysis
plus some pragmatic suggestions and
pointers voiced by the "suffering
purchasers".
ukay bistari victim
DrMohamed Rafick Khan, president of
VICTIMSMalaysia, is a victimof an
abandoned property development
himself. “In the case of abandoned
housing projects and the number of lives
affected, I have zero respect for the
government, zero respect for theMinistry
of Housing, because I feel they are not
doing their jobs. Decisionmakers are not
taking authoritative steps and executing
remedial measures. Housing Act laws still
do not protect the interest of purchasers.
If you look at the National Land Code, the
government actually has the power to take
over a parcel of land even if someone has
purchased it. The buyers are “naked”, they
are not protected. Under section 352, the
State Government can evoke abandoned
land. Therefore, the
issue of abandoned
land can be settled and solved
, but the
authorities are simply not taking
appropriate decisive steps to solve these
problems,” he says.
Dr Rafick believes that this problem
of abandoned projects arises largely
due to:
1) Poor existing laws and
enforcement procedures, which
have been biased against house
purchasers since 1969
2) Poor, inconsistent and intentional
mismanagement of project finances
3) Scope for shareholders to exploit
'corporate veils' in order to avoid
prosecution
genting valley
purchasers
Bob Steedman and Saran Kaur are on the
committee of The Genting Valley
Purchasers Group, still waiting for the
liquidators Dr Ler Cheng Chye andMr
LumTuck Cheong tomake some form
of a proposal, so the owners canmove
onwith their lives. “Many of us can’t
afford lawyers. For nearly seven years,
we have been trying to come upwith an
amicable settlement outside the courts
knowing that we do not have the financial
means to sustain a long drawn legal battle
in court. We just want what is ours
–
our
just and legal rights that we have paid for.
For medium income-earners like us,
“experienced” lawyers and solicitors
would prove prohibitingly expensive.
How can average purchasers like us,
who are in this difficult situation, gain
access to justice? The banks and
liquidators, having deep pockets, can
keep us in court for the rest of our lives.
A substantial number of the people who
bought into this scheme are retirees
who have suffered now for 10 years
without a home,” they share.
Bob and Saran have invested
substantial time andmoney running from
pillar to post. Frombanks to government
bodies, various authorities, state federal
government officials, even corporate
bigwigs... without any relief. The last
meeting with the liquidators ended
like all else has in the past, without any
practical proposition, decision, direction
or resolution.
"Who else canwe turn to ...
as there is
no one above this court appointed
administrator
?” Saran opines.
WIDESPREAD ANGST
Amember of the public, whowishes to
remain anonymous, suggested that the
government use the
Build-Then-Sell (BTS)
concept
. “The system is not new. It was
introduced years ago but put in place only
in the last Housing Development Act
amendment.
The biggest mistake is that
this lawwas not mademandatory. If
developers have a choice, theywould
naturally opt for the one that is to their
benefit
.” The BTS concept is also called the
10-90 system, where the purchaser pays just
10%upon signing the S&P, and the balance
90%only upon the hand over of the
completed, constructed house. “Now
wouldn’t this be a dreamcome true if this law
were enforced?” he adds wistfully.
“Being nice doesn’t work anymore, yet
they say our “group” of property purchasers
are troublemakers.
If our queries and
problems had been duly addressed and
resolved, wewould not have any reason
for this persistant probing
.”
"None of the relavant authorities have
stepped forward to help resolve the problem.
It has thus reached a point where we need to
behave in a manner which ensures our voice
and opinions are heard.”
Another “victim” states: “At our recent
meeting with the liquidators, there was a
hint that they wanted us to “TOP UP” for
rehabilitation of the land. What more do
they want? Where in heaven’s name do they
think we can get more money from? We are
already in full debt. The least they can do,
even if the land is not converted, is to give us
the title ownership. That would at least give
us some locus standi.”
SIMMERINGQUESTION(S)
“
The role of the liquidator is supposed
to be independent and unbiased
. They
are supposed to examine all assets of the
party going into liquidation, prioritising
and ranking all the debtors according
to the quantumof financial debts as per
accepted practice.
Unfortunately the house purchasers are
always placed at the very bottomof this rung,
the last to receive anything, ...if at all.”
The liquidators are apparently appointed
by the court. “Curiously however,
the
“names” of the liquidators are submitted
by the developers in the liquidation
request submission letter where the
developer will usually propose three
liquidators
.
Is this fair and unbiased?
”
“ExistingMalaysian laws have toomany
loopholes. Further, relavant authorities are
not pursuing the required due diligence and/
or executing proactivemeasures to fulfill
their responsibility to protect the public.
Not surprisingly this has now snowballed
into a humungous problemaffecting nearly
RM10 billion in suffering purchasers' funds.
How long can the authorities continue
fooling people with artificial reports and
doctored figures?”
INSIGHTS
CUT AND KEEP
CLARIFICATIONS sought...
From the Selangor
Government
1) The
Ministry of Housing
has
allegedly informed that abandoned,
incomplete housing projects do not
fall under their purview, since these
are considered "plots" and "not
houses".
Is this correct?
2) Consequently, which Selangor state
government ministry (or body) is the
appropriate authority under whose
purview this problem falls?
3) Even so, does the
Menteri Besar's
office
have a role to play towards
ensuring the rights andwelfare
of
law-abiding, tax paying citizens and
voters, who are being
accidentally
victimised
by an establishment of
which he is the current CEO?
From the Banks/Financial
Institutions
4)What are the roles and
responsibilities of the main bank and
other institutions financing the
development and purchases.
•
Towards (a) the developer,
and (b) the purchasers who
are ultimately producing the funds
which will earn the bankers' profit.
•
In the Genting Valley Group's case,
this list includes several prominent
banks.
5) Can at least some of these banks
provide a check-list of basic
guidelines for potential purchasers to
ensure they are well-informed and
protected before signing S&P
documents.
6)What is the role of the official
liquidator(s)? Do the liquidators
require seven years to table and
execute a pragmatic proposal to
resolve a problem?
From the Legal Experts
7) Finally, when a project "
is abandoned
"
what steps and measures should the
aggrieved (or duped) purchasers take
to regain their legitimate rights and
financial investment.
