EOT issuance compromises house buyers

Dr Mohamed Rafick Khan bin Abdul Rahman

7 Nov 2019, 8:51 pagi

Updated a year ago


LETTER | We refer to the parliamentary reply related to the written response from the Housing Minister  Zuraida Kamaruddin to MP William Leong in Parliament on Tuesday.

In the minister's written response, the minister acknowledged it had given "Extension of Time" (EOT) using its prescribed powers under Section 24 (2) and Regulation 11(3), of the Housing Development Act. This means that the minister has given preferential treatment to the developers to complete their project without the need for the developer to pay liquidated damages to purchases.

This happened rampantly under the BN government and it is a shock to see that such activities continue to take place under the PH government despite its promise to provide pro-people policies.

The people's interest has been compromised. In the FY2018, 93 developers were given this exemption and in FY2019 (up to July), 46 developers have been given the exemption at the expense of the house buyers despite there is a pending decision on the matter at the Federal Court.

Looking at the reasons cited by the minister, it can be seen that most of the issues are related to the early construction stage and local authorities. It means that the developer is weak in planning and addressing local community issues. Most of this issues could have been easily resolved before the developer applies for APDL (developer licence) to promote and sell their products. 

Unfortunately, the developers have been cunning enough to apply for APDL at a very early stage so that they can sell a promise at the early stage of development and the leverage of EOT.

While we agree that the law provides an avenue to the developer to apply but the decision to allow EOT should have been taken in a manner that also protects house buyers' rights. The sole purpose of a developer applying for EOT is to escape from paying liquidated damages (LAD) when the project is not completed in the agreed timeframe.

Based on verified information, KPKT has provided EOT by reviewing the justification provided by developers on the construction issues and did not factor in the impact on the house buyers. KPKT also did not look at the audited and forecasted financial position of the company before giving the EOT.

 This means that KPKT is blinded to the actual financial motivation of the developer. It could possibly mean that KPKT has sided the developer to ensure it remains profitable and protect the company from paying LAD even though they are capable to do so. Why should EOT be given if the company is profitable and can pay the LAD?

People voted PH into power with a hope it will be different from BN. It's clear that the people's mandate has been taken lightly. Perhaps it is time for minister Zuraida to step down from her position. We were hoping for a change and that has not happened.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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