Forfeiting land of abandoned projects

ZERO TOLERANCE: As a last resort, victims of abandoned housing projects could seek a court order to compel the forfeiture of the land of the project, and thereafter for the State to appoint another developer to revive it

In my previous article (NST RED 12th October 2012), I argued that with the intervention of the Federal Government or alternatively the State Government, it is financially feasible to revive the thousands of abandoned housing projects in Malaysia. I also stated that Malaysians require the Federal Government and State Governments to demonstrate their Political Will and to provide Political Leadership to revive and rehabilitate these abandoned housing projects.

Government intervention: The Federal Government can invoke provisions in the Housing Development (Control and Licensing) Act 1966 and the State Governments can invoke provisions in the National Land Code 1965 (NLC) to intervene to revive the thousands of abandoned housing projects in Malaysia.
Powers of the Federal Government: Powers granted to the Minister of Housing and Local Government (the Minister) vide the Housing Development (Control and Licensing) Act include:
1. Power of Investigation (Section 10);
2. Powers of the Minister to give directions for the purpose of safeguarding the interests of purchasers (Section 11);
3. Powers of the Minister with the concurrence of the Minister of Finance to direct a company to assume control and carry on the business of the housing developer upon such terms and conditions as the Minister may determine (Section 11(b)); and
4.Powers of the Minister to give general directions (Section 12).
Clearly, Sections 10, 11, 11(b) and 12 of the Housing Development (Control and Licensing) Act empower the Minister to intervene to revive abandoned housing projects.

Powers of State Governments under the National Land Code 1965: The State Governments can also step in to rescue the victims of abandoned housing projects by invoking the relevant provisions in the National Land Code 1965 (NLC) as follows:
1. Non-payment of quit rent: When a housing project is abandoned, it is envisaged that the quit rent payable would be in arrears. If such be the case, this would warrant a forfeiture of the housing project land under Section 100, causing the land to revert to the State Government Authority.
2. Breach of express and implied conditions : When a housing project is abandoned, it is probable that the Developer would have breached a condition for land use conversion vis-à-vis his failure to complete the houses within the stipulated time period. Section 106 provides for time to be of the essence in respect of the conditions that require the proprietor of the land (Developer) to complete the development and construction of the houses within a stipulated time period.
The Developer most likely would also have breached the implied condition under Section 116 where a residential building suitable for the specified use must be erected within two years, as it is also a condition applicable to alienation (transfer) of the land.
3. Abandonment for more than five years: If the housing project has been abandoned for more than five years, it would be highly probable that Section 125 was breached.
4. Liability to forfeiture for breach of conditions
When the Developer has breached some or all of the conditions listed above, the housing project land would be liable to forfeiture to the State Government Authority under Section 127.
5. Abandonment of land for more than seven years
If the housing project has been abandoned for more than seven years with the developer not in effective occupation of the land or has done no act to evidence their title, Section 352 could be invoked and the land would revert to the State Government Authority.

When a housing project has been abandoned for more than seven years, the Land Administrator is empowered by Section 129 to forfeit the land which shall then revert to the State Government Authority. Such forfeiture would take effect upon notification in the Gazette.

Abandonment of Victims: It is recognised that since 2005, efforts have been made to revive abandoned housing projects in Malaysia by both the Federal Government and the State Governments. It is an undeniable fact that there are still many abandoned housing projects, some abandoned for more than 10 years or even 20 years, that are still abandoned. It is unclear what the ultimate fate is for these projects.

Victims’ active involvement in forfeiture process: The victims of abandoned housing projects have the right to know what the Federal and State Governments intend to do with the remaining abandoned housing projects and if the Federal Government and the State Governments intend to abandon them to their fate.
Whilst they wait to know their fate, victims of abandoned housing projects can and should be actively involved in the revival of their housing projects especially through the forfeiture process when the lands of these abandoned projects are liable to forfeiture to the State Governments.

Effects of forfeiture: After the abandoned housing project has been forfeited to the State Government Authority:
1. The abandoned housing project shall revert to, and vest in, the State Government Authority as State land, freed and discharged from all titles and interests subsisting or capable of arising immediately before the forfeiture took effect;
2. The ownership rights of the developer will be extinguished;
3. The Chargee Bank’s rights against the land as per the registered Charges will be extinguished;
4. All Caveats lodged against the land by the end finance banks will be extinguished;
5. The State Government Authority will have the freedom to appoint new developers and/or new contractors to revive and complete the abandoned housing project;
6. The affected house buyers may apply to the State Government Authority to be given the houses that they bought many years ago; and
7. The State Government Authority will have performed their duties and honoured their obligations to the people who had in the first place elected and put them in power to serve them.

Commitment from Selangor State Government: Yang Berhormat Iskandar Abdul Samad, Chairman of the Selangor State Housing, Government Property and Squatters Committee was in 2008 quoted in The Star (Metro Central) published on 7th April 2008 as having said:
“Thousands of people are affected by abandoned schemes as they come up with money to pay deposits for their houses and pay monthly instalments to the banks ….. There are also projects that have been abandoned when they almost reached completion …. Whatever the reasons are, we do not want the people to suffer and the state government will be doing everything possible to improve the situation”.

Victims of abandoned housing projects in Selangor: In the light of the Selangor State Government’s stand on abandoned housing projects in Selangor as reported and in the light of Iskandar Abdul Samad’s statement as quoted above, I suggest all victims of abandoned housing projects in Selangor immediately contact YB Iskandar at his office at the Selangor Government Secretariat in Shah Alam to seek the Selangor State Government’s intervention to revive your long abandoned housing projects.

Victims, take action!: I suggest ALL victims of remaining abandoned housing projects in Malaysia immediately contact your respective Members of Parliament and State Legislative Assembly Members to seek the Federal Government and respective State Government’s intervention to revive your long abandoned housing projects.
You, the people had in the first place elected and put them in power to serve the people. As your elected representatives, they should now perform their duties and serve you and do everything possible to get the Federal Government and respective State Governments to intervene to revive your long abandoned housing projects and to put an end to your suffering!

Victims’ last resort : After having tried all possible avenues with no interventions from either the Federal Government or the respective State Governments and your abandoned housing projects remain abandoned, do not despair! There is still hope!

Order of Mandamus: Victims of abandoned housing projects may seek a Declaratory Order from the High Court, declaring that the provisions of the NLC have been violated by the Developer, and the land affected ought to be forfeited.

The aggrieved purchasers, individually or collectively could then apply to the High Court for an Order of Mandamus to compel the Land Administrator to perform his duties under the NLC, which inter alia, is to forfeit the land where the abandoned housing projects are located for breach of condition and thereafter to revive and rehabilitate the abandoned housing projects.

The aggrieved purchasers’ application for an Order of Mandamus from the High Court is lawful and is statutorily supported by Section 417 of the NLC that provides for the general authority of the Court to “direct the Registrar or Land Administrator to do all such things as may be necessary to give effect to any judgment or order given or made in any proceedings relating to land, and it shall be the duty of the Registrar or Land Administrator to comply with the order forthwith”.

We must send the message that Malaysians have zero tolerance for abandoned housing projects. Even if there is only one abandoned housing project left, it is one abandoned housing project too many.

Read more: Forfeiting land of abandoned projects - RED - New Straits Times http://www.nst.com.my/red/forfeiting-land-of-abandoned-projects-1.171652#ixzz2d3QrxoNf