More legal bite to enforce bumi quota

State government is seeking to fine-tune mechanisms to prevent abuse of the bumiputra housing policy, says Selangor Housing and Property Board (LPHS).

Its executive director Datuk Dr Juhari Ahmad said some of the changes included requiring developers to sign statutory declarations (SDs) promising not to sell designated bumiputra units to non-bumiputra buyers.

“If the developer does not comply with the declaration, action can be taken under Section 199 of the Statutory Declarations Act 1960.

“Under contract law, buyers who sign sales and purchase agreements can also take legal action against developers who violate the bumiputra quota,” he said in a statement responding to the article “Selangor should waive penalties” which appeared on Nov 20 in StarMetro.

It was the latest in a series of reports highlighting cases of developers who sold bumiputra units to non-bumiputra buyers without going through the proper process.

Company directors could also be required to sign letters of undertaking (surat aku janji), which, if breached, could lead to civil action, said Juhari, adding that these were among proposals discussed during a series of engagement sessions with the state housing chairman, Selangor Land and Mines Office (PTGS), Real Estate and Housing Developers Association Malaysia (Rehda), National House Buyers Association (HBA) and Special Task Force to Facilitate Business (Pemudah).

“The housing exco member will continue to engage with stakeholders, including the State Legal Advisor’s Office, to find a solution,” he said.

As immediate action, Juhari said a task force involving Selangor agencies would be set up to address housing ownership issues, including problems related to issuance of strata titles.

Its terms of reference would include resolving concerns about projects violating bumiputra quotas, he said, adding that the task force would be a collaborative effort between LPHS and PTGS.

On the same issue, legal experts emphasised the importance of developers signing both SDs and letters of undertaking to uphold government policies.

And if it was discovered that developers had provided false information, legal action could be taken against them, said lawyer Tan King Le.

“If a false declaration is made, it constitutes a punishable offence under the Penal Code.

“The individual making the SD must be high-ranking officials, like a company director.”

For SDs, an individual signs a document before a commissioner of oaths and makes a sworn statement that the contents are true.

In a letter of undertaking, company directors jointly commit to fulfilling duties required by government agencies (such as LPHS) to adhere to the bumiputra policy.

“Based on the SD, charges can be filed. For the letter of undertaking, legal action can be taken for any breach.

“Ideally, the entire board of directors should sign the SD to ensure accountability,’’ said a lawyer who only wanted to be known as Kim.

Tan said enforcement was also crucial.

“We often hear about developers getting blacklisted when their projects are abandoned, but this does not prevent them from starting a new one.

“The mechanisms and laws are in place, so why is there no action taken against chief executive officers and company directors for breaching the law?”