Build and Sell Housing

The Malaysian government is considering to introduce the "build and sell" concept to housing developers in the country. They are thinking of ways to encourage the developers to adopt this concept. Why do we have to wait for so long to introduce this concept? The current "book and pay progressively" method is in fact a scam, but it is bewildering the Malaysian government has allowed it to go on for so many years. Imagine one can simply register a company and pose as a housing developer and starts to advertise to sell non existent house lots, all he has to show is an impressive billboard along the highway claiming how the completed units would look like. When more and more of the public fall into his trap he will have more money to make his scheme look more impressive by renting cozy air-cond office and beautiful sexy staff to receive visitors, with the buyers' money! He may even con some poor kampung folks into a deal whereby they allow their lands to be used as proof of his project's site. More people are hence lured into booking lots from this "developer". When the "developer" has collected even money he will just disappear. The victims will complaint to the government, the government will then take "stern action", that is to cancel his licence...HAHAAHAHAHA!!! He will simply apply for another licence, what is the big deal? Those victims who had only paid for the deposits are lucky, because that is what they will lose and no more. I know of a guy who was not so lucky, he not only paid the deposit but also signed the charge agreement with the bank to release bridging financing to the developer. His nightmare began when the "developer" absconded with the deposits, the financing bank kept chasing him for payment which he obliged initially. But when he discovered that the abandoned project showed no hope of revival, he stopped paying the progress payment. And the bank kept sending him reminder after reminder urging him to pay up. He went to the bank and explained that the project was abadoned, he lost so much money so it would be inhuman to ask him to carry on paying for a non existent house. You know what the bank oficer replied? He said, "I can't help you, that's between you and the developer. Since you had signed the charge agreement you have to pay!" My friend refused to pay. So the bank put his house up for auction and sent him a letter informing him of the action through a lawyer. The economy reccession had already set in by then, and there was no bid of the auction. The auctioneer's fees and legal fees were then added to the buyer's account. The bank repeated the proceedure every month, each time the reserved price was lowered but still no bidder. Interests on the amount were also grwing fast. My friend's account outstanding amount snow-balled up to more than 3 times of the original loan amount! Talk about "Ah Loong"! He pleaded with the bank's manager not to put his house for auction so frequently, as it was reccession time. Moreover, the Local Housing and Development Ministry refused to issue the "Occupancy Certificate or Certificate Of Fitness, whatever" for various reasons. It was unlikely that anyone will bid for it. But the bank manager refused to listen to the buyer's plea. This dragged on for more than 10 years, during which time he spent every cent of his life savings trying to salvage his dream house, often falling prey to con men who claimed to have "jalan" to help. Finally he spent his last sen and still no house to call his own. The house was eventually auctioned off at about 1/4 of his debt amount and he is still paying the balance today and renting a house. This is a real story, it happens in Malaysia. It happened to my friend, and it can happen to you! By the way, where is the developer who ran away with the depoeits, is he still around? Of course he is. He is very respected, owns a string of properties and resorts and fast food business. Eat your heart out man!