Some 207 non-bumiputra homeowners in USJ One Park, Subang Jaya were previously saddled with millions in penalty fees for unknowingly purchasing bumiputra units. — RAJA FAISAL HISHAN/The Star
Penalty fee waiver granted by Selangor govt paves way for strata title process
AFTER years of uncertainty, 207 non-bumiputra homeowners in USJ One Park, Subang Jaya, can finally breathe a sigh of relief as the Selangor government has agreed to waive a staggering RM15.32mil in penalty fees.
These homeowners, who had unwittingly bought bumiputra- designated units, were saddled with penalty fees and unable to obtain strata titles.
Clear skies ahead: Over 200 non-bumiputra homeowners in USJ One Park, Subang Jaya, are relieved that Selangor has agreed to waive RM15mil in penalty fees. — RAJA FAISAL HISHAN/The Star
However, following a persistent appeal via the Selangor Housing and Property Board (LPHS) to the state government, the hefty penalty was subsequently scrapped.
The precedent could pave the way for other owners who are caught in a similar situation in Selangor.
Long journey
USJ One Park joint management body chairman Gwee Chee Seng said the homeowners felt a sense of relief and joy upon receiving notice of the waiver approval from LPHS in January.
“It has been a long four years as we tried to fight to have this issue sorted.
“It was not right that owners were being held liable for something that was not their fault.
“With the penalty lifted, we can now move forward with the long-delayed strata title process,” he said when met at USJ One Park during the waiver announcement.
StarMetro’s report on Nov 6, 2023.
On Nov 6, 2023, a StarMetro report titled “Penalty dilemma” highlighted the issue of several hundred homeowners in Selangor left in limbo after unknowingly purchasing residential units intended for bumiputra buyers.
These homeowners were facing penalty fees amounting to millions of ringgit as the developers had gone into liquidation.
ALSO READ: Firms breach bumi-housing quota, buyers penalised
The fee that was being imposed comprised the bumiputra discount of 7% and an additional 5% penalty, amounting to a total 12% of the purchase price.
In the case of USJ One Park, the affected owners were contacted by the liquidator for the developer, about four years ago, to start the strata title process.
The project is a mixed development comprising landed properties and a condominium.
During the application, the affected homeowners were asked to pay a penalty for purchasing bumiputra lots.
The matter was also brought up several times by Subang Jaya assemblyman Michelle Ng during the state assembly sitting.
Finally, during a Dec 18, 2024 sitting, the Selangor State Executive Council (MMKN) approved the waiver appeal which was submitted by the liquidator.
Affected homeowners listening intently during Ng’s announcement regarding the penalty fee waiver at USJ One Park.
In a letter dated Jan 27 from LPHS to the liquidator, sighted by StarMetro, it stated that the appeal to waive all bumiputra discount payments and quota violation charges for 207 residential units in USJ One Park, totalling RM15.32mil, had been approved.
It also said the state granted permission for ownership transfers to the buyers who had been awaiting their titles and the transfer process must now be completed at a reasonable fee.
Additionally, the directors of the company responsible for the property development have been blacklisted from future projects in Selangor.
Ng said the state’s decision could set a precedent for similar cases in the future.
“We know of another situation in Selayang, and just recently, I was contacted by Pelabuhan Klang assemblyman Azmizam Zaman Huri about a case in his constituency,” she said.
Gwee feels a sense of relief and joy upon hearing news of the penalty waiver.
“We need long-term and stricter solutions to make sure this does not continue to happen.”
Ng reiterated her proposal that a better reporting mechanism be put in place to prevent cases of overselling bumiputra lots.
She had previously suggested implementing a real-time system, which would update LPHS on the number of bumiputra and non-bumiputra units sold in a particular development.
“In my conversations with Selangor housing committee chairman Datuk Borhan Aman Shah, he was prepared to discuss and consider the recommendations,” she said.
“We will continue to push through to make it a reality.”
Chang says further action should be taken besides blacklisting the company directors.
Meanwhile, National House Buyers Association (HBA) honorary secretary-general Datuk Chang Kim Loong said further action should be taken besides blacklisting the company directors.
“What is stopping these individuals from forming other companies using proxies,” Chang questioned.
He urged the state government to prosecute the directors, lodge police reports and impose fines, advocating for “lifting the corporate veil” to hold them personally liable.
Chang also suggested that civil action be taken to recover the millions in waived penalties, arguing that the developer had unfairly benefitted from the sale of these properties.
“If the government does not take action, it will open the floodgates for others who deliberately avoid completing title transfers and then liquidate the company while pocketing the money.”
Finally, he stressed that it was the duty of the Housing and Local Government Ministry (KPKT) to ensure all property titles were properly issued and transferred to buyers without further delays.
Precedent case
Following the successful waiver appeal by non-bumiputra buyers in Subang Jaya, other affected owners are hoping for the same consideration from the Selangor government.
In another development in Rawang, owners of 574 units also received a notice, from liquidators appointed for the developer in 2023, that they had been sold units meant for bumiputra.
The liquidator found that the 40% bumiputra quota set by MMKN in 2001 had been violated and about 90% of the units were sold to non-bumiputra buyers.
They too were required to pay a penalty of 12% of the purchase price in order to complete the transfer process.
In total, the state is requiring them to pay RM7.89mil in penalty charges.
One of the affected owners, Susan Lawrence, said an appeal for a penalty waiver had been submitted by the liquidator to LPHS in 2023.
Susan hopes the state will consider a 100% penalty waiver for unit owners in Rawang too.
“However, we were informed that LPHS was only willing to waive 5%, which is the bumiputra quota release mechanism charge,” she said.
“We are still required to pay the bumiputra discount of 7% although we all paid full price for the property.
“Why should this be the case when it was not the owners’ fault that this situation happened.”
She added that several appeals had been submitted by the liquidators but rejected by LPHS.
Susan, along with several other affected buyers, have set up a pro-tem residents association last year, to facilitate a resolution in the matter.
“Since the liquidation process in 2023, we can’t buy or sell the units unless we pay the penalty.
“We are hoping that with the success of USJ One Park, we will also receive the same consideration from LPHS for 100% waiver,” she said.
Fine tuning needed
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.
Selangor enforces a 40% bumiputra quota for housing schemes, accompanied by a 7% bumiputra discount.
More than 500 non-bumiputra unit buyers in a development in Rawang have been put in a tight spot after they were sold bumiputra lots by the developer. — Filepic
The quotas may only be released through a strict mechanism that housing developers must adhere to before the units can be sold to non-bumiputra purchasers.
In Selangor, this is outlined in the Selangor Bumiputera Quota Maintenance Mechanism 2.0 circular issued by LPHS.
In 2023, StarMetro reported that the state was refining mechanisms to prevent abuse of the bumiputra housing policy.
LPHS executive director Datuk Dr Juhari Ahmad was reported saying that developers might be required to sign statutory declarations and letters of undertaking, promising not to sell bumiputra units to non-bumiputra buyers.
He said any breach could result in action taken under the Statutory Declarations Act 1960 or civil lawsuits.
