Abandoned housing buyers jolted by bankruptcy notice

PUTRAJAYA (Feb 21): More than 50 house buyers, accompanied by their families and friends, gathered outside the Malaysian Anti-Corruption Commission's (MACC) office in Parcel D, Putrajaya, recently.

They were among many apartment buyers at the abandoned Yamin Estate project in Pulau Indah, Klang, who were served with bankruptcy notices in January for the loans that they took to buy the apartments.

Their woes are typical of abandoned housing schemes in the country, where the developers abscond and buyers are left in the lurch. Not only do they fail to see their dream house, they are also saddled with huge debts due to what buyers claim to be negligence on the financiers' part.

Buyers are crying foul, claiming the banks are at fault in the first place for disbursing progressive payments without verifying the construction progress.

They also claim that there appears to be an unwritten pact between developers and the banks, leaving buyers in the losing end, and want MACC to look into possibilities of collusion and abuse of authority.

"I was recently issued a bankruptcy notice. I refused to continue paying the installments to the bank. Why should I? The house is not even built and there is no sign that it will ever be built," an unlucky purchaser, Mohd Zulfatah Omar, 44, said.

Only RM41,000 was released to the developer, based on the progressive payment Claims, but after 11 years the debt has increased to RM47,000.

"No house exists. The only things left are remnants of piling and some structural work. How can I pay for something that is not there? The bank cannot just release the payments without inspecting the project site to confirm the progress claims made by the developer," continued this frustrated factory worker.

Mohd Zulfatah is among 2000-odd buyers of apartments at the Yamin Estate development in Pulau Indah in Klang who signed the sales and purchase (S&P) agreement with the now defunct developer in early 2000 and were promised possession in stages between 2002 and 2004.

The five-phase development was supposed to consist of medium-cost apartments -- Bahtera Apartments, Yamin Heights, Yamin Towers, Indah Heights and Mutiara Heights.

Zulfatah not only did not get to see his dream home completed but is now confronted with an uncertain future, as he was declared bankrupt last month.

Zulfatah is among more than 2,000 buyers who feel they have been cheated by the developer and let down by financial institutions.

Before going to MACC, they lodged a complaint with the Malaysian Islamic Consumer Association (PPIM, which advised them to go to the authorities.

"How long am I to tolerate this problem -- keep paying for a house when I will never see the day me and my family can move into it? I signed the S&P in April 2002. The contract clearly stipulated that the apartment would be ready within 24 months. My installments were RM270 a month for the first 2 years," 43-year-old Mohd Nizam Ismail told Bernama.

Nizam's loan amounted to RM92,000, including insurance, and it was fully disbursed to the developer, though there was no progress in the construction. The bank then demanded that Nizam pay the full installment amounting to RM649 a month.

"I negotiated with the bank. The payments were reduced to RM200 a month for another two years and then we negotiated again. I later refused to even pay the RM50 monthly installment. The installments I paid went to a house that never got completed," Nizam explained, while his wife Nuzatulshimah Masikan, 40, and their two children looked on.

Nizam, who also received the bankruptcy notice, pointed out that the outstanding loan amount has now ballooned to RM191,000.

Nuzatulshimah lamente: "I am only a housewife and we have children, 13 and 17, who need to further their studies, so we will need to take a study loan for them."

She is now worried about the family's financial future, as her husband has been blacklisted by the financial institutions due to the bankruptcy status.

Nizam, however, managed to buy another house three years ago, where he has been living with his family.

A private sector employee, Norazah Sajidin, 48, was also at the MACC office to seek a solution for her predicament.

She has been having sleepless nights since she signed the S&P with the developer.

"I withdrew RM15,000 from my EPF savings. The bank disbursed RM65,000 from the total loan amount to the unscrupulous developer. I am still paying for my monthly installments. I used to pay RM300 every month but now, they have allowed me to pay only RM50 a month. By keeping up with the payment I have managed to save myself from being blacklisted by the financial institutions," Norazah said.

Because of the bad experience, Norazah never thought of buying another house. She is currently living in a house she built on a piece of her father's land.

"I will not buy another house. This painful experience has made me extremely cautious. I hope to get out of this debt and want back all my money," she said, adding that she no longer wants to continue paying for a house that is never going to be completed.

The chairman of the Bahtera Apartment Buyer's Committee, Anuar Ibrahim, showed documents obtained from the Klang Municipal Council (MPK) confirming that the developer at Pulau Indah had no building plans.

"In fact, no plans have been submitted by the developer to MPK. Moreover, the land has yet to be converted from its original agricultural status to residential status.

"The architects to the project withdrew their involvement in 2001, at the initial stage of the project. No application for amenities for the housing project have been registered nor submitted," Anuar explained.

While house buyers should be wary of their contractual commitment and their rights, banks also have to be accountable for all loan disbursements.

It is certainly improper for the banks to disburse payments to developers who make false progress-payment claims for their projects.

The buyers now want MACC to investigate the parties involved, bring closure to the whole dark episode, and exonerate the buyers from their debts. — Bernama