Abandoned housing projects: Is Malaysia a lawless country?

It is scandalous that 195 housing projects could have been carried out by unlicenced housing developers under the eyes of various parties that could have prevented this happening. At a conservative estimate of 100 units per project, this means at least 19,500 purchasers were cheated. The Ministry of Housing should disclose the actual number of house buyers affected. There could still be more illegal projects not uncovered yet.

We congratulate the Chief Secretary to the Government Tan Sri Mohd Sidek Hassan for pulling up and reprimanding all these parties. He has stated that action will be taken against all those who shirked their responsibilities. Any action taken, whether against government servants or professionals in the private sector, must be punitive in nature and not “slap on the wrist” type. The authorities must move away from the culture of “advising, reminding and reprimanding” as these have never worked to make people law-abiding.

The Housing Ministry advises house buyers to check the credentials and background of developers before entering into purchase agreements. Where can the public get all this data? Is it wrong for the public to believe that if a housing developer puts up a project, the authorities should have seen to it that all relevant laws had been complied with by the developer and that the project is being lawfully carried out?  Why shift the burden onto the man in the street when government officials and professionals are the culprits who allow or even join-in to do illegal things?

Architects are the submitting persons, i.e. they submit the plans to the Local Authorities for approval. Are they unaware that anyone planning to build more than four units of housing accommodation must have a housing development licence? Is there no duty on them to ensure they are acting for legitimate developers as their direct involvement would be affecting large numbers of innocent house buyers? They are also known to have issued certificates of completion to help developers claim progress payments from banks when actually the work is not completed. Thus some rogue developers were able to collect 100% payment when the houses were far from 100% complete.

Officers in Local authorities cannot be unaware that anyone wanting to build more than four houses under a single development plan must have a housing developer’s licence. Then how is it that plans were approved without checking that the pre-condition to build more than four units had been complied with by the person submitting the plans for approval? Or were all the 195 projects developed without any approved building plans? If built without any plans, were the local authorities so blind that they could not see housing projects under construction when their enforcement officers can smell out small illegal structures?

The land office plays a very important part in the approval of development plans as it gives feedback on the status of the land to the Local Authority. Did the Local Authorities approve the plans without referring them to the land office, resulting in housing schemes being built on agricultural land and even Malay reserve land? If this is the case, then not referring the plans to the land office must have been deliberate. The MACC should investigate such cases as they smell of corrupt practice.

Then there are the solicitors who prepared Sale and Purchase Agreements for the rogue developers. Being officers of the law and of the Court, and not ordinary businessmen, they should have known better than anyone else that building more than four units of housing accommodation needs a housing development licence from the Ministry. According to the ethics of their profession, if not according to any legal requirement, should they not have required the developers to produce their housing development licences before agreeing to be their panel lawyers?

CAP had in the recent past written to the Bar Council enquiring whether its members had a duty to check whether developers had a valid licence before preparing S & P for them. The conveyancing practice committee gave us a curt reply that we could file complaints against lawyers with the Legal Profession Disciplinary Board. The issue we had raised, i.e. whether lawyers had a duty to check the credentials of the developers before acting for them, was completely sidestepped. We have written to the President of the Bar Council asking whether ETHICS is no longer relevant in the legal profession and are awaiting his reply. The Bar Council has been extremely lenient with the black sheep in its fold, thus encouraging malpractices to go on. The lawyers who prepared S & P for the illegal housing projects must have earned handsome sums of money from the purchasers.

When individuals apply for housing loans from banks, the banks require land search, bankruptcy search etc. before processing the applications. So how could the banks and their lawyers have approved bridging loans to developers in the first place, then loans to purchasers for properties that obviously did not have clean, registrable titles? The banks went against their own stringent requirements that they enforce upon ordinary loan applicants.

All the wrongful acts by the various parties cannot be dismissed as cases of “oversight”. The same parties, when dealing with ordinary persons, do not have “oversight” of all the requirements!

Greed was at the root of the so-called “oversight”. Every party had money to make if the projects were carried out, regardless whether the purchasers got their houses or not. Thus any action against the rogue architects, Local Authority officers, bankers, lawyers must be commensurate with the suffering that their actions caused the innocent house buyers.

Banks should be made to write off loans of all abandoned units; where there is delay in completion, banks should be made to write off the interest for the delayed periods. Disciplinary action like stoppage of increments and promotions should be imposed on government officers. In the cases of professionals like architects, engineers and lawyers, they should be heavily fined and deregistered.

The Bar Council is empowered to act on its own volition against its members whose conduct is unbefitting of an advocate and solicitor or which brings or is calculated to bring the legal profession into disrepute. We urge the Bar Council to rise to the occasion and start disciplining the black sheep in its fold. It should apply to the Disciplinary Board to immediately suspend all those solicitors who had prepared S & P for the unlicenced developers, and go on to deregister them. These solicitors had done so to earn money. Instead of safeguarding the interests of the innocent public. They had teamed up with the unlicenced developers to make money. They should be struck off the rolls. It is the Bar Council that has to see to this.

CAP also calls for a full, in-depth enquiry to be carried out into this scandalous state of affairs that has gone on too long. The public has suffered for far too long at the hands of rogue developers, bankers, architects, lawyers, and those who support them by closing their eyes. It is as if Malaysia is a lawless country. Enforcement agencies themselves must be taken to task if they do not enforce the laws and make them work. Laws are mere pieces of paper until they are enforced.

Letter to the Editor, 4 April 2012