BY Roznah Abdul Jabbar
A High Court decision to grant a winding-up order on Sagajuta (Sabah) Sdn Bhd has stirred a hornet’s nest in the east Malaysian state, leading to a chorus of calls to review Sabah’s building by-laws.
Api Api Assemblywoman Christina Liew pointed out that the court order means that the developer is now unable to complete the already delayed 1Sulaman Condominium project, leaving its many buyers in the lurch. This, she said, points to the inadequacies of existing laws and the fact that they do not provide enough protection to buyers in the event of a failed project.
“Perhaps the Government should add to the current by-laws, stating that at least some percentage of the project must be built up first before they are allowed to sell. For example, 50 per cent build up,” Liew suggested in a press conference after the court had made its ruling earlier this week.
She also believes that insurance should be made mandatory for entire projects, so that insurance companies can cover additional costs if developers have to be replaced because they cannot complete a project.
The 1Sulaman Condominium project was a key project under the Sagajuta banner, and as such, it has become a major concern following the winding-up order. The two-block condominium project attracted some 1,600 purchasers, many of whom were first-time buyers that took sizeable loans to pay for the units.
Initiated in 2009, the project was supposed to be completed with vacant possession to buyers by 2012, but construction came to a halt in 2011 with the towers only partially completed.
Other than the 1Sulaman Condominium, the company has also been involved in the development of the 1Borneo Shopping Mall, 1Borneo Condominium and a Hotel Complex in Inanam.
Liew said that she received many calls from concerned owners, who are now uncertain about the status of their purchase.
“Remember that many of the homebuyers have been paying the loans to the bank while at the same time, paying rents for their accommodation,” she said.
Liew now urges the Local Government and Housing Ministry to intervene by providing immediate assistance to unit purchasers and speed up the process of appointing a new developer to take over the project.
“We also need to remember that the construction cost has increased significantly [from the onset of the project]. Now, four years after the project should have been completed, the construction cost is no longer the same. Who is going to absorb this? Will buyers have to fork out the differences? Is that fair?” she asked.
Liew said this is precisely why new and clearer laws are urgently needed.