Housing rights advocates have pinned the blame on both developers and regulatory bodies for "blatant abuse" in the existing delivery system for new houses, pointing out that this has caused much financial and emotional stress for buyers.

Real Estate and Housing Developers Association past president Eddy Chen said the conceptual, approval and construction processes are wide open to abuse.

"There are between 50-60 pieces of legislation, guidelines, rules and regulations, and bylaws governing the housing industry. All these vary from one state to another and from one local council to another. This is the part of the delivery system that is most open to abuse," he said.

Chen said absent or ambiguous local plans and guidelines, including wide discretionary powers vested in approving officers, have created loopholes.

"This has encouraged a culture of facilitation between the approving authority and the applicant, or what is locally known as gao tim .(considered settled)," he alleged during a recent seminar on adequate housing, organised by the Human Rights Commission of Malaysia (Suhakam).

"A rough estimate of the hidden costs from this culture is between five and 15 percent of the house price."

Chen said the situation has also been affected by shoddy workmanship due to the use of unskilled foreign labour, poor supervision, "greedy consultants" and a shortage of building materials.

'Lax supervision'

Agreeing that regulatory bodies have much to answer for, National House Buyers Association secretary-general Chang Kim Loong claimed that "those lower down" are hiding behind officialdom and "irrelevant laws" in avoiding a duty to be transparent.

He said that local authorities, in particular, have been lax in monitoring and supervising housing projects, as well as guilty of issuing premature or inaccurate certification on completion of the work.

As a result, house buyers have often been left to deal with problems like design flaws, shoddy workmanship and sub-standard units that do not meet approved specifications.

Chang said the situation is exacerbated by the attitude of some officials who insist that the problem is "not all that bad" and that it is only the minority of developers or industry professionals who give the rest a bad name.

He said the non-compliance with industry rules and professional ethics has caused untold misery to house buyers and led to their incurring high maintenance costs.

Regulatory bodies, he said, should scrutinise the feasibility of proposed projects and the financial standing of developers before issuing licences. In addition, they should be prepared to act against developers who breach laws and those who abandon projects.

"We laud the former prime minister's call to prosecute and jail developers who have blatantly ignored the laws, and the terms and conditions of development," he said, noting that current legislation empowers the authorities to even wind up errant companies.

Chang said it was ironical that a man was jailed six months for stealing less than RM5 from a phone booth, when errant developers have not been caught even when they absconded with millions of ringgit.

Call for protection

At the same time, Chang suggested that the government heeds calls for institutional protection of house buyers and reviews the current delivery system, said to favour the interests of developers.

He noted that misleading advertisements, complete with "glossy and attractive" sales brochures, are a major cause for concern because this uses a 'sell and build' approach in house delivery.

"This practice has resulted in countless buyers suffering (because projects may later be abandoned), and mostly after having spent all their life savings. They also have to service bank loans," he said.

"In countries such as the US and Australia, houses are first built before they are sold."

Describing the existing system as depressing, Chang said that buyers' trust in developers is far too often misplaced.

He proposed the 'build-then-sell' concept so that the onus to deliver houses is shifted to developers and financial institutions, instead of being borne by buyers.

"This approach will also put an end to the problems of defects, shoddy work, incomplete infrastructure and facilities, and non-issuance of the certificate of fitness or strata title," he added.