Greater protection for buyers with new housing Bill

(Published in the Star newspaper 1st December 2011 issue: page 3)

By LOH FOON FONG 

KUALA LUMPUR: The Housing Development (Control and Licensing) (Amendment) Bill 2011 with a new provision that developers who abandon their projects can be jailed has been passed in the Dewan Rakyat.

Housing and Local Government Minister Datuk Seri Chor Chee Heung said that Section 18A provides for errant developers to be fined not less than RM250,000 but not more than RM500,000 or jailed not more than three years or both.

Currently, Section 22(1) of the Housing Development (Control and Licensing) Act 1966 only provides for housing development company directors to be jailed not less than 12 months but not more than three years as well as fined not less than RM50,000 and not more than RM250,000.

“The amendments passed involved eight existing provisions, one new provision and one abolished provision,” he said during the second reading of the Bill yesterday.

Chor said the ministry had successfully revived 83 housing projects and was in the midst of reviving 61 projects while another 22 were at an early planning stage of being revived.

Another amendment to the Bill was the term “housing developers” under Section 3 of the Bill which now includes private liquidators appointed by the court in the event it takes over the responsibility of failed developers.

An amendment to subsection 6(1) set the deposit for a housing developer’s licence at 3% of the development project cost, an increase from the current RM200,000 while changes to subsection 6(1)(a) and 6(1)(b) ensure that only developers with strong financial standing are involved in the industry.

Section 8A allows individuals to apply for the sale and purchase agreement to be cancelled at any time if there was no continuing development at a project site for six months or more.

With the amendment to Subsection 16N(2), the Tribunal for Home Buyers’ Claims could now hear cases involving sale and purchase agreements signed between house buyers and unlicensed housing developers while subsection 16AD(1) increases the current penalty rate against developers who refuse to honour the tribunal’s award from not less than RM5,000 but not more than RM10,000, to not more than RM50,000.