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Firms breach bumi-housing quota, buyers penalised


More than 500 unit owners of a housing project in Rawang were sold bumiputra lots without their knowledge. — Photos: AZLINA ABDULLAH and LOW LAY PHON/The Star

MORE than a decade after purchasing their dream homes, hundreds of homeowners in Selangor find themselves trapped in a nightmarish situation.

They had unknowingly bought bumiputra units and are now saddled with penalty fees amounting to millions as the developers have gone into liquidation.

Shawn Nair and his wife Vicky Fang bought their unit in 2006 and moved in after it was completed in 2008.

Their new home was marketed as a well-planned township surrounded by greenery in Rawang, Selangor.

“It was a townhouse and was built on elevated ground, surrounded by foliage-covered hills,” said Shawn.

However, early this year, the couple received a notice from liquidators appointed for the developer who had built their home.

It said the developer had gone bankrupt and had sold them a bumiputra unit.

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The couple discovered that they were not the only ones.

ALSO READ: Lawmakers seeking justice for unwitting housebuyers

A total of 574 homeowners are now being asked to pay millions of ringgit in penalty fees to the Selangor government for purchasing bumiputra lots in the project which had a total of 1,716 units.

The bumiputra housing quota policy has been in force since the 1980s.

Developers are required to set aside a percentage of available units in a scheme for purchase by bumiputra buyers.

Bumiputra land or property can only be purchased and owned by bumiputra.

A bumiputra unit is usually 7% to 15% cheaper than a regular one, depending on the state.

Also read: Association: Unjust to penalise housebuyers

Innocent buyers penalised

In the case of Shawn and his neighbours, the Selangor Housing and Property Board (LPHS) issued a notice to the liquidator on Jan 16 this year.

The notice stated that in order for LPHS to release the bumiputra lots to non-bumi owners, the buyers have to pay RM13mil in total.

Otherwise, the blanket consent for transfer will not be released.

For Shawn and Fang to receive their strata title, they have to pay a penalty of over RM20,000.

“We are still in shock as we paid full price (for the property),” said Shawn.

“There was no discount, nor was there any indication in the sales and purchase agreement that this was a bumiputra unit.”

Another unit owner, Susan Lawrence, 43, was equally dismayed.

“The developer had breached the approved bumiputra quota allocation, meaning he had sold to non-bumiputra buyers.

“If we don’t pay, we won’t be able to get our strata titles.

“The Selangor Land and Mines Office (PTGS) is refusing to release the titles unless we pay a 12% penalty,” she said, stressing that she had also paid full price for her unit.

“It feels like we are being punished even though we are innocent, and that is unacceptable,” she added.

Shawn felt that the discrepancy should have been detected at the start.

“When you look at a bumiputra lot and see an Indian name attached to the title, wouldn’t this trigger alarm bells?

“Without a strata title, we cannot sell or refinance our property unless we pay the penalty to enable the memorandum of transfer,” he said.

Also read: Lawmakers seeking justice for unwitting housebuyers

Shawn (left), Susan (second from right) and other housebuyers of the Rawang development are in a bind.Shawn (left), Susan (second from right) and other housebuyers of the Rawang development are in a bind.

The liquidator discovered that the developer had failed to apply for blanket consent and breached the allocation quota in the sale of bumiputra units.

In documents sighted by StarMetro, Selangor State Executive Council (MMKN) had on July 9, 2001, approved a minimum 40% bumiputra quota with a discount of 10% to bumiputra buyers for the project in Rawang.

The developer had breached the quota requirement and had sold about 90% of units to non-bumiputra buyers.

The liquidator’s letter to buyers stated that after contacting LPHS, the state housing board still wanted homeowners to pay a penalty for breaching the bumiputra quota, but was willing to give a discount.

But buyers like Lawrence and Shawn are adamant that they should not be penalised, and are refusing to pay.

Most are middle-income earners who are already struggling with the high cost of living.

The fee that is being imposed comprises the bumiputra discount of 7% and an additional 5% penalty, or 12% of the purchase price (see chart).

Same issue elsewhere

Homeowners in a project in Subang Jaya are facing a similar predicament.

Several were told to pay the penalty for their bumiputra units, which were built by a different developer.

A unit owner, who wanted to be identified only as Gwee, received vacant possession of his house in 2013.

The project is a mixed development comprising landed property and a condominium.

Gwee was contacted by the liquidator for the developer about three years ago to start the strata title process.

Several homeowners in a Subang Jaya mixed development have also been asked to pay a 12% penalty.Several homeowners in a Subang Jaya mixed development have also been asked to pay a 12% penalty.

During the application, he was asked to pay a penalty as he had purchased a bumiputra lot.

“This came as a shock as nowhere in my sales and purchase agreement did it state that I was buying a bumiputra lot.

“It wasn’t only me; about 200 of the owners of the strata property are also affected by this (overselling of bumiputra lots),” he said.

Gwee said owners were being forced to pay an additional 12% of the purchase price.

“So if a unit was purchased for RM500,000, the owners now have to pay an extra RM60,000. This is an exorbitant amount,” he said.He added that as the developer was currently under liquidation, it further complicated the issue.

Gwee said there had been little progress in resolving the matter.

He said most of the owners felt that they should not be held liable for something that was not their fault.

When asked to comment on the matter, Selangor housing and culture committee chairman Borhan Aman Shah said there was a need to ensure that companies could not take advantage of the situation to make a profit.

He emphasised the importance of identifying the developers involved, adding that non-compliance (with the bumiputra quota policy) could affect these companies’ future projects in Selangor.

“As administrators, we have rules that can affect their development plans if they do not follow government policies,” he said.

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