The Housing Tribunal Blunder: another great disservice of the Minister of Housing and Local Government

- at the DAP forum "The great housing TRIBUNAL blunder"
by Ronnie Liu Tian Khiew

(Kuala Lumpur, Tuesday): The portfolio of Minister of Housing and Local Government was traditional held by MCA leaders for the past few decades. It has been held by MCA leaders such as Michael Chen, Neo Yee Pan, Ng Choon Kiat, Lee Kim Sai, Ting Chew Peh and now Ong Ka Ting.

Nothing could be said very much about their contributions as the minister for housing. All these years, homebuyers in the country have been subjected to all kind of injustices and problems, and they usually get very little or no help from these ministers.

The recent great blunder is just another disservice committed by MCA housing minister. Datuk Seri Ong Ka Ting could have avoided the huge embarrassment if he has listened carefully to DAP MPs like Chong Eng and Teresa Kok. Both have pointed out to him in the Parliament that the legislation for the Tribunal has no provision for retrospective effect.

It is hard for us to believe that the minister and the law officers with the ministry and the Attorney General's chamber could have made such a glaring mistake. It is equally hard to believe that the minister could drag his feet for so long on this matter.

If he has made a mistake in drafting the regulations for the Tribunal, he should be bold enough to admit it and apologise to all homebuyers and all Members of Parliament. If he believe that he has done no wrong, he should immediately take the necessary steps to resolve the matter.

A friend of mine, who's a lawyer, has pointed out to me that there are two matters in Section 16 of the Act: that of a civil claim/ liability and that of a criminal liability. He said while the criminal aspect is clearly not the purview of the Tribunal, the civil aspect is simply a restatement of the existing rights/liabilities and therefore is retroactive/ retrospective in nature.

He argues that the Chief Justice can and has the authority to call up the matter as soon as possible for review, since the matter is of such public import.

He also argues that the minister and the AG have the rights to get the lawyers to bring this up in court immediately, instead of dragging their feet.

In fact, Ong as the housing minister, in the first place, should have directed his lawyers to hold watching brief to assist the court, since the legislation drawn up by his ministry and subsequently passed in the Parliament was challenged in court.

Coming back to the problems and hardship of the homebuyers thanks to the MCA housing ministers all these years.

Before the coming into force of the regulations pertaining to the Tribunal, there existed rights of the Homebuyer to sue the Developer for breaches in accordance with the Housing Development {Control & Licensing} Act 1966.

For these rights to be enforced, especially for late delivery claims, these claims used to be filed into the Magistrate Courts or Sessions Courts, which are under the jurisdiction of The High Court of Malaya.

The Tribunal was set up in 2002, simply to speed up the claim process and to make it easier and cheaper for the homebuyers. Which is why under Section 16U of the Act, advocates and solicitors are not allowed to attend the hearings of the Tribunal, unless in the opinion of the Tribunal, there are complex issues of law.

The S&P Agreement that is supposed to follow the standard in the Act, more often than not, seems to be abused. Here are just some of the problems frequently encountered:

a.        Claims by Developer for maintenance etc. Even before the CF is issued, the Developer claims for maintenance charges.
b.        The "management company". The property and all of the areas belong to the homebuyers. The Management Company is simply the "trustee" of the owners. They cannot be charging the homebuyers all kind of fees and maintenance costs.
c.        The certificate of fitness. There has been a whole series of "Temporary CF", where the Developer uses this to claim against the homebuyers, especially if the developer is late. These Temporary CFs only valid for 6 months. What is going to happen if things are still not ready after the 6 months?


a.        When a Homebuyer buys the home, he/she usually takes a loan from the Bank.
b.        More often than not, there is no individual title at that time.
c.        And nearly always, the bank is always the provider of financing for the Developer.
d.        So, the Homebuyer signs a loan document, which is called a Deed of Assignment containing a power of attorney, where the Homebuyer assigns all his /her rights to the Bank.
e.        The Bank then deals directly with the Developer.
f.        As the Developer completes each and every stage, it demands from the Bank, payment.
g.        As the payment is given to the Developer, the Bank charges interest (to the Homebuyer) on the amount disbursed to the Developer.
h.        When the Developer issues the Certificate of Practical Completion, the Bank starts to demand repayment, even when there is no Certificate of Fitness, CF.
i.        The Developer also demands for "outstanding and overdue" maintenance charges.

So, the Homebuyer, when he or she is forced to collect the keys is faced with two hurdles:
1.        Amount "due' to the Developer.
2.        Amount "due" to the Bank.

But there is no CF, nor is there the Title!

How about the concept of the Deed of Assignment/ Power of Attorney?

This document is the most effective mode of bypassing the strict rules for strata tiles etc. It is also the most effective mode in favour of the Developer who applies for a small financing but the homebuyers are made to pay up-front.

It is not in favour of the Homebuyers simply because the ministry does not enforce the law properly and effectively.

In the past, many homebuyers and consumers have urged the ministry to adopt the "build first and sell later" policy to protect the rights of homebuyers. We have never heard Ong Ka Ting utter a word on this policy ever since he becomes the housing minister. This minister, as usual, hides behind his motto- silence are golden.


* Ronnie Liu Tian Khiew, DAP national publicity secretary and DAP Selangor chairman