Legal News: New Housing Rules to Curb Property Speculation

PETALING JAYA: In a move to further curb property speculation, developers who sell more than four residential units to a single person or a company must now register the purchaser with the housing controller within 14 days of the sale-and-purchase (S&P) agreement being signed.

This new requirement is expected to improve transparency in the housing industry and to keep the prices of houses stable.

A National Housing Department spokesman told theSun the regulation, which was enforced from mid-May, is provided for under the Housing Development (Control and Licensing) Act 1989.

(The housing controller comes under the National Housing Department of the Urban Wellbeing, Housing and Local Government Ministry.)

The spokesman said that to further ensure transparency between developers and buyers, all developers must display in detail the selling price, which includes all free offers of goods, services and payments.

“In this way, should a buyer decide not to accept the offers, the developer has to deduct the amount of the value of the special offers from the sales price,” he added.

The spokesman said developers who fail to comply with this regulation would be liable to face court action. The offence provides for a fine of up to RM20,000 or imprisonment of up to five years or both upon conviction.

He also revealed that as of end-April, 117 developers were on the Urban Wellbeing, Housing and Local Government Ministry’s blacklist for abandoning their projects.

Once blacklisted, the developers and their board members cannot apply for new housing developer’s licences or advertisement and sale permits.

Following amendments to the Housing Development (Control and Licensing) Act 1966 (Act 118), which would come into effect by the end of this year, licensed developers will be charged if they purposely abandon their projects.

They will be liable to a fine of between RM250,000 and RM500,000 or imprisonment of up to three years, or both if convicted, he added.

However, of the 206 private housing projects declared abandoned between 2009 and April 30 this year, 151 had been successfully revived to benefit 23,942 house buyers while 29 projects are in the planning stage for revival while 26 others are in various stages of recovery.

To help prevent developers from abandoning their projects, he said the department will increase the housing developer’s deposit from RM200,000 to 3% of the estimated cost of construction.

“This will help ensure that only developers with strong financial positions are involved in housing development and there will be sufficient funds to revive a housing project if it is abandoned,” he added.

Meanwhile, the spokesman said as of end-May, the department was also monitoring 209 “sick or ailing” projects. These are projects whose completion dates were more than 30% behind schedule or homes that have not been handed over to the buyers by the dates stipulated in their S&P agreements.

To reduce the number of “sick” or ailing projects, he said the department’s private housing monitoring division would act as a mediator or facilitator for problematic projects.

This will be done by:
> coordinating with the relevant parties to resolve the problems;
> conducting regular checks at project sites;
> strict enforcement through fines and blacklisting of errant developers; and
> close monitoring of the housing development accounts.

He said the department had issued 349 compound notices and collected RM2.3 million in fines from errant developers so far this year.

By: Adrian Phung
Source: theSundaily
Published on: Tuesday, 3 June 2014

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