Using audits to catch housing projects about to fall sick

 

A total of 429 projects, comprising 70,727 homes, have been categorised by the government as sick projects.

PETALING JAYA: A house buyers association has called for quarterly audits to be made of housing projects under construction for early detection of problems.

Experts should comb through these reports to see if government intervention is needed, said Chang Kim Loong, secretary-general of the National House Buyers Association.

The audits should be conducted by teams comprising accountants, engineers and architects. “Their report would serves as a diagnosis of what is going on at all housing projects.,” he told FMT.

Chang was commenting on a report that over 400 housing projects were “sick” or problematic, having fallen behind schedule by 30% or where the time promised for delivery of vacant possession has lapsed.

Local government and development minister Nga Kor Ming told the Dewan Rakyat that a total of 429 projects, comprising 70,727 homes, were categorised as sick projects.

Chang said while the housing laws provided many safeguards to protect buyers, there has been no deterrent punishment for wayward developers who end up producing sick projects.

He said the law provides for fines of RM250,000 to RM500,000 and jail terms of up to three years for developers in problematic projects.

“How many wayward housing developers have been prosecuted since 2015 to date? From what I understand, there are none. If the government fails to charge recalcitrant and wayward developers, this spate of sick and abandoned projects will continue,” he said.

Licences of higher standards

A property developer, Jerry Chan, said sick housing projects are inevitable because of the economic downturns.

He suggested that a higher benchmark be set for new property developers, as inexperienced developers might encounter problems.

Chan, a former chairman of the Penang Real Estate and Housing Developers’ Association, said developers should have qualified and experienced people at the helm.

“Only those with a fairly distinguished track record should be allowed to embark or be licensed to carry out large projects,” he said.

Cheah said building contractors have to be qualified in order to tender for projects according to their classification. “Perhaps something like that for developers,” he said. - FMT