KUALA LUMPUR: A liquidator has warned prospective buyers of residential and commercial properties to look for reputable developers with good track records before committing to a purchase.
Radiant Consulting Asia Sdn Bhd managing director Yogan Kanapathipillay was commenting on a June 11 statement by Local Government Development Deputy Minister Akmal Nasrullah Mohd Nasir that the ministry has thus far identified 481 “sick” projects and 112 abandoned ones nationwide.
Ahmad Nasrullah said apart from having a task force to oversee the matter, the ministry is in talks with relevant agencies and is in direct negotiations with the National Water Services Commission and Public Works Department in efforts to revive the projects.
“Sick and abandoned projects are those which have exceeded their scheduled completion period and it takes longer to revive them as discussions over long periods are needed,” the minister had said.
Yogan revealed that since 2007, his firm has liquidated at least 50 development companies and helped more than 10,000 property owners to obtain strata titles because developers wound up their business before the strata titles were issued.
Other incomplete projects were sold and most purchasers received some returns.
“This is why it is critical to check the reputation of the developer. Otherwise, purchasers stand to lose the bulk of their hard earned money in the event the project is abandoned,” he told theSun.
Yogan said in December last year, his company finally sold the Mutiara Beach Resort serviced apartments project in Port Dickson, Seremban, which came to a halt 29 years ago.
The project was officially classified as abandoned in 2003, and Augustine T.K. James from Radiant Consulting was appointed as the official liquidator in November 2013, replacing the Insolvency Department.
“We finally sold the project to a subsidiary of Kumpulan Hamzah Kwong Hing Realty Sdn Bhd for RM20 million, thus allowing the purchasers to get part of their money back,” he said.
Giving some background on the project, Yogan said it was in a deplorable, severely derelict and disrepair state. This affected the surrounding neighbourhood and landscape as well.
But in May, the 195 owners of units there heaved a sigh of relief as they finally had closure for the project and received 20% of what they had paid.
Of the 195 owners, 53 individuals were cash purchasers who bought the units between 1994 and 1997, while the remaining 142 took housing loans from various banks before the developer wound up.
Yogan said Koperasi Jimat Cermat dan Pinjaman Mercantile Bhd was the landowner and had 36 units due to it entering into a joint venture with the developer.
He said it took 10 years for Radiant Consulting to liquidate and sell the Mutiara Beach Resort project as it had to identify the purchasers, deal with the banks that took over some of the units and carry out other due diligence work.
“Crucial project documents, including the Development Order, building plans and others had not been handed over by the developer. Hence, a lot of additional work had to be done to trace as many documents as possible. This can take years to complete.
“The sale was finalised upon obtaining a court order in December last year. The process is tedious and painstaking as legal and technical matters had to be fulfilled,” he said.
Mutiara Beach Resort unit purchaser Hermani Abdullah, 75, a former bank officer, said he paid RM477,000 in cash for his three-bedroom unit in 1997.
“I feel heartsick when I think of all the hard earned money that I have lost, but I agreed with the liquidator’s proposal to sell because at least I can get back 20% of what I had paid. It’s better than nothing since the developer has gone bankrupt.”
Another purchaser, who asked to be addressed only as Chin, 71, said he bought a two-bedroom unit in 1997 for about RM280,000.
“I am very grateful to the liquidator. The company has taken 10 years to resolve our problems and get a purchaser for the project. It (the liquidator) kept at it, despite Covid-19 and economic downturns over the years.
“Of course, like anyone else, I too feel disappointed at having lost a lot of money. It was tough.
“I had to service my bank loan while renting a place to live in Kuala Lumpur. It was financially stressful, but now at least I am getting some money back, thanks to the sale.”
