Abandoned Housing Case Study

Discuss the adequacy of the Housing Development (Control and Licensing) Act 1966 in preventing an abandoned housing project. What do you think the best solution(s) to this problem?

In Malaysia, the main statute that controls the housing development is the Housing Development (Control and Licensing) Act 1966. The Ministry Urban Wellbeing, Housing and Local Government (MUWHLG)has the jurisdiction to control and supervise the private housing developments and its regulations. The objective of the Act is to ensure that the purchasers will receive protection from bogus and irresponsible developers. The developers are obliged to follow all the requirements that have been state under this Act as well as other statutory requirements in order to receive
However, there are always loopholes in the rules and regulations set. As a result, there is still a possibility that the developers fail to complete the project due to various reasons.

In Malaysia, abandoned housing projects are increasing gradually. In order to solve this situation, we need to look into the causes behind. One of the reasons of causing abandoned housing projects is that there are still lack of legal provisions and protection in order to stop or prevent such incidents to occur as well as protect the interest of the purchasers. Besides, the measures taken by the government to solve the problems is still inadequate. They are ‘too little too late’ and unable to be enforced before the problems would have occurred. The issues and causes on abandoned housing projects are evidently unable to be fully addressed by our law and regulations. The court is still unable to provide a decisive answer regarding the interest of the purchaser in abandoned housing projects. This is because there are too many
There are two types of housing delivery system, namely, the ‘Build-Then-Sell system’ and the ‘buying off the plan system’. Build-Then-Sell system simply means that the developers only sell those houses that are completed together with the issuance of Certificate of Completion & Compliance (CCC). Under this system, the developer is responsible for the financial for construction. The purchaser has nothing to do with the financing requirement during the construction phrase. Thus, the risk of abandoned housing development can be minimised. Through this system, the strong and reputable developers can adopt this scheme whereas the smaller ones will fall away. As a result, the purchaser will have more confident towards the strong and reputable developers as they believe that their interest is guaranteed. Under BTS system, the developers are not allowed to collect progress payment based on certifications from architect, as under the STB concept. The second method in housing delivery in UK is the “buying off the plan”. When signing the sale and purchase agreement, the purchaser is required to pay 10% of the purchase price and the balance 90% shall be paid only when the houses are completed. Hence, the purchaser may lose 10% of the deposit instead of 90% of the payment if the project is abandoned mid-way. The balance 90% of the purchaser is