Presented by Ar. Ezumi Harzani Ismail (pics credit).
Act 118 - Housing Development Act 1966
An Act to provide for the control and licensing of the business of housing development in Peninsular Malaysia, the protection of the interest of purchasers and for matters connected therewith.
What is ‘Housing Development’? Act 118 : Section 3. Interpretation.
In this Act, unless the context otherwise requires— “housing development” means to develop or construct or cause to be constructed in any manner whatsoever more than four units of housing accommodation and includes the collection of moneys or the carrying on of any building operations for the purpose of erecting housing accommodation in, on, over or under any land; or the sale of more than four lots of land or building lots with the view of constructing more than four units of housing accommodation;
“housing accommodation” includes any building, tenement or message which is wholly or principally constructed, adapted or intended for human habitation or partly for human habitation and partly for business premises and such other type of accommodation as may be prescribed by the Minister from time to time to be a housing accommodation pursuant to section 3A;
Note: Message - term used in law that carries meaning of dwelling house.
Standard Sale and Purchase Agreement
HOUSING DEVELOPMENT (CONTROL AND LICENSING) REGULATIONS 1989
Sub-regulation 11. Contract of sale.
(1) Every contract of sale for the sale and purchase of a housing accommodation together with the subdivisional portion of land appurtenant thereto shall be in the form prescribed in Schedule G and where the contract of sale is for the sale and purchase of a housing accommodation in a subdivided building, it shall be in the form prescribed in Schedule H.
Schedule G: SALE AND PURCHASE AGREEMENT (LAND AND BUILDING)
Schedule H: SALE AND PURCHASE AGREEMENT (BUILDING OR LAND INTENDED FOR SUBDIVISION INTO PARCELS)
Schedule G: SALE AND PURCHASE AGREEMENT (LAND AND BUILDING)
Clause 4. Schedule of Payments
(1) The purchase price shall be paid by the Purchaser to the Vendor by installment and at the time and in the manner as prescribed in the Third Schedule. The Vendor is not bound to commence or complete the works in the order referred to in Third Schedule and the Purchaser shall pay the installments according to the stage of works completed by the Vendor…
(2) Every notice referred to in the Third Schedule requesting for payment shall be supported by a certificate signed by the Developer's Architect or engineer in charge of the housing development and every such certificate so signed shall be proof of the fact that the works therein referred to have been completed.
LAM CERTIFYING GUIDELINES
Rules on Certifications
Certificate of Completion and Compliance
Act 118 : Section 3.
Interpretation. In this Act, unless the context otherwise requires--
“certificate of completion and compliance” means the certificate of completion and compliance given or granted under the Street, Drainage and Building Act 1974 [Act 133] and any by-laws made under that Act certifying that the housing accommodation has been completed and is safe and fit for occupation but does not include partial certificate of completion and compliance;
Certification for Release of Money
Act 118 : Section 22E.
Release of moneys by a stakeholder.
(1) Any stakeholder who releases any money to a housing developer or to any other person knowing that such an act is contrary to the provisions of the sale and purchase agreement shall be guilty of an offence and shall, on conviction, be liable to a fine which shall not be less than ten thousand ringgit but which shall not exceed one hundred thousand ringgit or to imprisonment for a term not exceeding five years or to both.
(2) Any person who knowingly and wilfully aids, abets, counsels, procures or commands the commission of an offence against subsection (1) shall be liable to be punished with the punishment provided for the offence.
Certification for Progress Payment
Act 118 : Section 22F.
(1) Any architect or engineer, as the case may be, who issues a progress certification knowing that the works therein referred to have not been completed in accordance with the provisions of the sale and purchase agreement shall be guilty of an offence and shall, on conviction, be liable to a fine which shall not be less than ten thousand ringgit but which shall not exceed one hundred thousand ringgit or to imprisonment for a term not exceeding five years or to both.
(2) Any person who knowingly and willfully aids, abets, counsels, procures or commands the commission of an offence under subsection (1) shall be liable to be punished with the punishment provided for the offence.
Many years ago, the Board had in placed the Noblest Scale of Fee called the Scale of Minimum Fee Rule (SMFR) and one Towering Figure of that Time, almost sharing the same stature of “Lord of the Rings - Gandalf”, our grandfather Architect nick-named “The King of the Loo” has risen to awake newbies architect that “Thou Shall Not Undercut Your Professional Fee” or “You shall Face the Full Force of the Board!”. Such “commandments” shiver through the spines of every newbies architects to the extent that one committed suicides because of such!
In reality, with the exception of Government Jobs, no private practice actually go by it or rather openly admitted to have not complying to SMFR, a staggering FACT shown by the polls conducted by both the Board and the Institute. Yet, the noble of noblest Board happily admitted that fact and the irony is these practices agree that such Rule shall be continued for perpetuity as it safeguard the interest of the practitioners. Now you know why Newbies are forced to take jobs at ridiculously low price as nobody has faith in this archaic rule.
For the benefits of Newbies so that they are not caught red-handed of committing such heinous “crime”, this is how the BIG BOYS did it. Assuming Construction Cost = RM100,000,000.00, “market Fee” (1.2%) = RM 1,200,000.00. What is in their appointment letter reflects, Construction Cost = RM30,000,000.00 and the Scale of Fee Rule (4%) = RM 1,200,000.00. Even with the compliance of the SMFR, one is able to manipulate the figures and that is how BIG FIRMS are doing to protect the interest of their shareholders. You are technically in compliance to the Rule.
SMFR is again going to be the same stale subject in the Professional Qualifying Examination but as a matter of surviving the Red Ocean to the Newbies, pledging your alliance to such will only make you death by hunger unless one is born with a silver spoon.