21-04-2025
- Business
- New Straits Times
NST Leader: Of developers and abandoned houses
ABANDONED and "sick" housing projects are on the rise. To curb the increase, the Housing and Local Government Ministry has blacklisted developers of such projects.
A total of 109 developers was the figure quoted by the ministry recently. As for abandoned projects, there were 119 nationwide as of last September, leaving 15,000 housebuyers in limbo.
Now that must be a humongous total for a small nation. To the National House Buyers Association (HBA), blacklisting developers is not the way to solve the problem that refuses to go away. HBA is right.
We think we are not wrong in interpreting blacklisting as a slap on the wrist. What the errant developer would do is pay the fine to get the company out of the blacklist, only to do it all over again. Hardcore errant developers would go a step further.
This isn't mere speculation. Past practice is evidence enough. They set up fresh subsidiaries for new projects.
The HBA, we are told, had for years called for the entire board of directors of a property developer — from the time the project licence is issued until the project is abandoned — to be blacklisted.
For some reason, the call has fallen on deaf ears. Malaysian regulators, whichever authority they represent, have got into the habit of being lenient to the extreme.
Little do they realise that such leniency doesn't discipline unprofessional conduct, nay it encourages it.
And in the case of abandoned or "sick" housing projects, it is no ordinary errancy; it is a criminal offence.
Prosecution is the way to go, HBA secretary-general Datuk Chang Kim Loong told the New Sunday Times.
In his view, blacklisting doesn't carry the same weight as criminal prosecution. He should know. He has seen developers do this over and over again for years.
The HBA, like many house buyers who have been cheated of their homes, is left wondering why the ministry isn't prosecuting them.
It isn't that there is no law criminalising such an act.
Following amendments to The Housing Development (Control and Licensing) Act, it is now a criminal offence for developers to abandon their projects.
Such an offence is punishable by a maximum jail term of three years, a fine of up to RM500,000, or both.
Chang has a good question: how many developers of abandoned housing projects have been prosecuted since the law was amended 10 years ago?
And he has an answer to his question, too: there has not been any news of such prosecution.
To him, the best legislation would remain an ornamental piece unless strict enforcement is carried out against the offenders.
The longer the law remains a decorative piece in the statute book, for that length of time will the house buyers feel abandoned.
Abandoned and "sick" housing projects stand in contrast to Putrajaya's move to encourage affordable homeownership.
The 2025 Budget is a document of such an encouragement. But what is the point of all the government initiatives if house buyers are not protected against the risks of developers abandoning their projects?
The Khazanah Research Institute is right to suggest that the Build-Then-Sell housing delivery system is the best model to stop projects from being abandoned. So does HBA.
