Академический Документы
Профессиональный Документы
Культура Документы
___________________________________________________________________________
In the Malaysian context project development is divided into three (3) stages, namely, the
predevelopment stage, the construction stage and the post construction stage. The post
development stage is when the completed property is handed over to the owner as required
and stipulated by the Housing Development Act (HDA, 2010). The flow of the procedures
and activities start from the initial right up to the delivery of a completed property, plays a
pivotal role in the planning of property development. A crucial brief overview of a typical
planning process in Malaysia, covering the legislature in the planning process, the
development plan and general implementation of development plan.
In a case study, Rosmah inherit 1000 acres of Agricultural land and she wants to
develop the said land into a mixed housing estate. She is engaging with the consulting
Quantity surveyor due to a Turnkey basis. Therefore, based on the housing and construction
environment in Malaysia, the following are the methods and steps that need to be taken by
her and the related parties due to develop the land;
Turnkey basis is a buildings and the construction that is designed, supplied, built, or
installed fully complete and ready to operate. The term implies that the end user just has to
turn a key and start using the building which are completely constructed.
Complying with the measures, in order for Rosmah to develop the 1000 acres of land
into housing estate, Rosmah is engaging with the consultant Quantity surveyor due to deliver
her requirements regarding the development of the land. Due to that case, the quantity
surveyor form a developer company consist of all the related parties who are the architect,
civil and structure engineers, mechanical and electrical engineers and town planners.
After that, it is needs to ensure that the developer appointed is registered and having a
certified licence due to develop the land. For example, the collaboration parties (the parties
whom the quantity surveyor had engaged) formed a registered developer company named
1
___________________________________________________________________________
Under Section 7A of the Act, it requires developer to open and maintain a housing
development account. Under this new provision, unless the developer is undertaking what is
known as the build and sell (build now and sell later) housing project, he is required to open
and maintain a housing development account with a bank or a finance company for each
housing development undertaken by him. Where the housing development is developed in
2
___________________________________________________________________________
The developer is required to pay into the account all purchase monies received by him
from the sale of the housing accommodation in the project and any other sum which may be
required by any regulations made under the Act to be paid into such an account. The
developer is not allowed to withdraw from the account except as authorised by the Housing
Developers (Housing Development Account) Regulations 1991 (hereinafter referred to as the
1991 Regulations).
The authorities are serious about the state of the housing development account
because under subsection (8), the Minister of Housing is given the power, where he considers
it necessary to do so, to appoint an approved company auditor to investigate the books,
accounts and transactions of such an account. The costs of such an investigation are to be
borne by the developer. A developer who fails to comply with Section 7A shall be guilty of
an offence and on conviction shall be liable to a fine not less than RM 10,000 but not
exceeding RM 100,000 and shall also be liable to imprisonment of up to 3 years, or both.
Under the 2002 Amendment Act, the penalty has been increased fivefold, a fine of not less
than RM 50,000 and not more than RM 500,000.
In addition to the above, the developer is also required to comply with every direction
given by the minister under Section 11 of the Act for the purpose of safeguarding the interests
of purchasers as well as other general directions given under Section 12 of the Act.
2.0 Ensuring the 1000 acres land is registered in the name of the Owner.
After appointing the developer, the land consultant (on behalf of the developer) need
to ensure that the 1000 acres of agriculture land is registered in Rosmahs name. This due to
ensure the ownership of the land is exist. Therefore, the land consultant needs to go to a
Land Office doing the search to ensure the register document of title of the 1000 acres land is
belong to Rosmah.
3
___________________________________________________________________________
The Mirror Principle states that the register reflects all the facts and interests of the
land such as the name of proprietor, land descriptions, area of the land and particulars of the
persons that have registered interests on the land. The Curtain Principle states that the
potential land buyer may only need to look at the register to get the information on the land
that he is interested in without counter checking with other documents.
The cumulative effect of these principles is that the Torrens system has conferred an
indefeasibility of title to the registered owner. As in accordance to case law of Teh Bee v K.
Maruthamuthu, the court held that under the Torrens System the registration is everything.
Under Section 89, it specifies the importance of register document of title as the
conclusive evidence of ownership of the land. While under Section 340 of Malaysia NLC
1965 it provides the concept of indefeasibility of title and interests in land. The expression
indefeasibility of title and interests means that the title or interest in respect of which the
holder is registered is immune from attack by adverse claims affecting the same land or
interest. However, the supremacy of such title is still subject to the following:
On the issue whether indefeasibility under the Code is immediate or deferred, the
Federal Court held, in Ardorna Properties Sdn Bhd v Boonsom Boonyanit. In this case, the
Respondent was the registered proprietor of a piece of land which had been sold and
transferred to the Appellant. The Respondent claimed that the vendor had forged her
signature, sold and transferred the land to the Appellant. The High Court dismissed the
Respondents claim. The decision of the High Court was reversed by the Court of Appeal and
the Appellant appealed. One of the questions of law posed for decision of the court was:
Whether the Appellant, a bona fide purchaser for valuable consideration without notice,
acquired an indefeasible title to the land by virtue of Section 340(3) of the Malaysia NLC
1965.
The Federal Court, comprising a panel of 3 judges, unanimously held that by virtue of
the proviso to section 340(3) of Malaysia NLC 1965, a purchaser in good faith and for
valuable consideration is excluded from the application of the substantive provision of
Section 340(3) of Malaysia NLC 1965. Therefore, this category of registered proprietors
obtains immediate indefeasible title to the land even if they acquired title through instruments
of transfer which are forged.
This decision drew much criticism from the legal parties as being 'clearly wrong'. It
also caused grave concern amongst land owners who became vulnerable to losing their land
even through the use of forged instruments of transfer. Many courts reluctantly followed
Adorna Properties as it was a judgment of the apex court of Malaysia.
The Federal Court, comprising a panel of 5 judges, first considered the question
whether Adorna Properties was correctly decided. According to their Lordships:
a) Subsection (3) of Section 340 of Malaysia NLC 1965 merely provides that any
title or interest which was defeasible by any of the circumstances specified in
subsection (2) shall continue to be liable to be set aside in the hands of a
subsequent holder of such title or interest.
5
___________________________________________________________________________
The Court, in a unanimous decision, concluded that the judges in the Federal Court in
Adorna Properties had misconstrued Section 340(1), (2) and (3) of Malaysia NLC 1965 by
coming to the erroneous conclusion that the proviso to subsection (3) applied equally to
subsection (2). By doing so, the Federal Court in Adorna Properties gave recognition to the
concept of immediate indefeasibility under the Malaysia NLC 1965 contrary to the provisions
of Section 340.
Therefore, it is essential to make sure that Rosmah is registered owner toward the 100
acres of agriculture land. Thus, once Rosmah has registered the land, her title cannot be
defeated, hence easier the process for the development.
2.3 Application of title from qualified to final to determine the boundaries of the land-
section 176(2) NCL
Rosmahs 1,000 acres land must be changed from qualified title to final title due to
determine the boundaries of the land. This is stated in section 176(2) NCL. Qualified title
shall confer on the proprietor the like rights in every respect as those conferred (as mentioned
in section 92) by final title, that the boundaries of the land shown on the document of title
thereto shall be provisional only except so far as any of them may have been established by
any earlier survey. Unless otherwise provided for under this Act, the land shall not be capable
of being sub-divided or partitioned, or included in any amalgamation, nor shall any building
thereon be capable of sub-divisions.
6
___________________________________________________________________________
In the case of land which became held under qualified title on a sub-division, partition
or amalgamation is on completion of the survey for the purposes of the issues of final title,
the rent payable in respect thereof shall be recomputed on the basis of the actual area of the
land as established by the survey. Any amounts underpaid or overpaid by way of rent in
respect of the period during which the land was held under qualified title, or in respect of
survey fees, shall become payable to or by the State Authority and in the case of amounts
underpaid, shall be paid before final title is issued.
The documents of final title to be prepared, registered and issued in respect of any
land shall consist of a register document in the form of a grant, State lease, Mukim grant or
Mukim lease, according as the land is held under the form of qualified title corresponding to
Registry title or that corresponding to Land Office title, and in perpetuity or for a term of
years and also an issue document in the form appropriate under this Act to the register
document in question. Where an issue document of qualified title exist in respect of the land,
the Registrar or Land Administrator, as the case may be, shall, before issuing final title is by
call for its production in section 166 and if it is not produced, take the further steps specified
in section 168.
The registration of register documents of title that has been prepared shall consist of
their authentication under the hand and seal of the Registrar or Land Administrator, as the
case may be, and the date of registration shall be inscribed on every such document by the
Registrar or Land Administrator. The provisions of section 89 to 91 shall apply to documents
7
___________________________________________________________________________
Every document of title shall be prepared in the name of the person or body last
registered as proprietor in the subsisting register document of title. Then it shall specify the
date on which the land in question was first alienated, the title number originally allotted
thereof and (if different) the number of the subsisting register document. It is also shall
contain, except in so far as they relate to matters which have ceased to be effective, the like
memorials, endorsements and other entries as are contained in the subsisting register
document (but, where that document merely refers to any conditions or restrictions in
interest, setting them out in full).
8
___________________________________________________________________________
Under Section 124, an application can be made to the State Authority for alteration
of any category of land use or for the imposition of any category. Application can also be
made under this section for the rescission of any express condition or restriction in interest
endorsed on, or referred to in, the document of title, or for the amendment of the same.
In addition, application can also be made under this section for the removal from the
document of title of such expression as rubber, kampong or any other express conditions
pertaining to land use.
An applicant under Section 124 of Malaysia NLC 1965 must fulfil the following
conditions that are:
a) The consent of all interested parties has been obtained
b) All dues to the State Authority have been paid
c) Pay such further premium is required
d) Pay such fees and other charges as prescribed
e) Pay the newly-determined quit rent
f) Comply with all such other conditions as may imposed by the State Authority
In relation to the land of Rosmah, as a housing estate will be developed, there will be
several types of residential types for example low cost housings, medium cost housing as
well as the high end housing to be develop. All of this also need to be notified to the
authorities. Besides, the essential procedure of the conversion from agricultural land to mixed
housing land, the land consultant must fill up applicable forms made available at Land Office
that are:
9
___________________________________________________________________________
However, an additional premium is imposed on the conversion of land use. The basis
for the computation of additional premium is provided in the various State Land Rules and it
is differs between rules. The roles of valuers are to determine the value of land according to
the basis adopted by the various states as stipulated in their respective Land Rules. Thus, the
next procedure of the land conversion is Rosmah need to the payment for land conversion.
The value that need to be paid by Rosmah are as follows:
In other word, the free hold land own by Rosmah must be change to leasehold land.
However, the applicant who is the land consultant on behalf of Rosmah may make an appeal
to the court to avoid from being change to the leasehold land.
Zoning is the term used for designating permitted uses of certain parcels of land by
local governments. The word is largely self-explanatory: the local government will designate
various zones for different uses of land, such as industrial, agricultural, commercial, and
residential. Zoning is also frequently used to designate the types of buildings that can be
erected in a particular area, such as high density housing, high rises, maximum height
restrictions, etc.
Of course, zoning laws are not without their critics or misuse. Along with potential
property right infringements, zoning has also been criticized as a means to promote social and
economic segregation through exclusion. By improper use of various land-use restrictions,
such as maximum density requirements, municipalities are able to artificially maintain high
housing costs, increasing the tax base while effectively excluding lower income groups.
However, sometimes zoning laws establish other restrictions such as a minimum lot
area and/or frontage length for building a house or other building, maximum building size, or
minimum setbacks from a lot boundary for building a structure. This is in addition to building
codes which must be met. Also minimum lot sizes and separations must be met when wells
12
___________________________________________________________________________
Therefore, in accordance to the zoning laws, if the surrounding neighbour of the 1000
acres land owned by Rosmah is already developed with the buildings type development
(housing), the application for planning permission for housing development to her land will
be approved if the consultant and the town planner prepare the complete and comprehensive
development proposal report.
In the process of planning, there are several conditions that the developer deem to
follow. One of the conditions that they must aware upon approval is for example in allocating
several percentage for low cost housing and also zoning search whether the place is zoned by
building, for residential and public purposes (road, treatment plant, green zone and etc).
Low-cost housing was officially introduced in the First Malaysia Plan (1966-1970)
to promote the welfare of the lower income population, and implemented through the State
with financial assistance from the Federal Government. During the First Malaysia Plan, most
of the low-cost housing was constructed to resettle squatter settlements in urban areas, and
for renting purposes).
This red tape method of delivery challenges the quality of construction, as it is not the
primary venture of private developers and merely for approval purposes. Low-cost housing is
also subjected to additional standard guideline for construction i.e. the Construction Industry
Standard - CIS 1: 1998 (1-2 storey) and CIS 2: 1998 (high rise flats). The CIS 1 and 2,
13
___________________________________________________________________________
a) Safety,
b) Adequate infrastructure,
c) Physical and mental health, and
d) Community
5.3 Green Zone
Protect existing natural resources and prevent future pollution from newly developed
lands are also the consideration that the developer need to take into account. Therefore, in
development plan, there is green zone. Green zone is the preservation of green area in a land
for development such as playground, landscaping work, parks and walkways. Normally, a
portion of land in a development must be voluntarily surrendered to the green zone area to
ensure a balance in the area e.g. 5% of the land in development use to develop the green
zone.
In development land, there are required to develop a green zone area to maintain the
high quality living environment. In general, the features of green zone in residential area to
create high quality which:
a) Prioritize walking, cycling and public transport, and minimize the need to
use cars;
b) Deliver a quality of life which residents and visitors are entitled to expect,
in terms of amenity, safety and convenience;
c) Provide a good range of community and support facilities, where and when
they are needed and that are easily accessible;
d) Present an attractive, well-maintained appearance, with a distinct sense of
place and a quality public realm that is easily maintained;
e) Are easy to access for all and to find ones way around;
14
___________________________________________________________________________
Before the developer develop the land, they must first identify the method to be use in
the housing area whether septic tank, bio filtration, oxidation pond or others. The selection of
15
___________________________________________________________________________
For example, septic tank means a basic form of on-site treatment facility consisting of
one or more compartments that provides treatment of sewage by means of sedimentation and
anaerobic process.
Besides, oxidation ponds, also called lagoons or stabilization ponds, are large, shallow
ponds designed to treat wastewater through the interaction of sunlight, bacteria, and algae.
Algae grow using energy from the sun and carbon dioxide and inorganic compounds released
by bacteria in water. During the process of photosynthesis, the algae release oxygen needed
by aerobic bacteria. Mechanical aerators are sometimes installed to supply yet more oxygen,
thereby reducing the required size of the pond.
Bio filtration is a pollution control technique using living material to capture and
biologically degrade process pollutants. Common uses include processing waste water,
capturing harmful chemicals or silt from surface runoff, and micro biotic oxidation of
contaminants in air. The use of indigenous microorganism enables this system to operate this
minimal maintenance due to its biological regeneration, thus this system serve as sustainable,
effective and economic filtration method in various waters and discharges for the
improvement of water quality. The bio filter can be very useful in various waste water due to
the efficiency for biological purification, good integration in environment and low sludge
production.
Therefore, all the sewerage system, treatment plant and the drainage and irrigation
plan need to be prepared and send for authority approval include together in the development
proposal plan.
Based on the above analysis and requirement, there are several percentages should be
determined by the town planner and the other consultants due to be allocate for the
development. The amount of the percentage allocated is also determined by the area of the
16
___________________________________________________________________________
Besides, for the residential building, there will also being divided into several
categories and numbers of building. For instance, these proposed land, the owner want a
mixed development housing estate. Thus these can comprise of 40 houses for low cost
building, 40 houses for medium cost building and 40 houses and high end buildings will be
build. However, the number and types of houses being develop depend on the requirement of
the owner (Rosmah).
After all the analysis required and document needed have been produced as well as
including them in the development approval plan , the next step that town planner needs to do
is applying for the planning permission. Based on the Section 21(1) of Town and Country
Planning Act, the application for planning permission shall be made to the local planning
authority which is must be in form and along with the documents, plans of the development
and fees.
Upon the application, local planning authority will gives written directions to the town
planner (applicant). This is mentioned in the Section 21(3) of the Act. Due to construct houses
and accommodation (buildings), town planner needs to follow all these following matters
which are prescribed in the written directions given by the local planning authority;
After receiving the written directions from the local planning authority specified, the town
planner shall amend the plan submitted with the application before accordingly (if there is only
17
___________________________________________________________________________
If necessary, the town planner is allowed to submit an appeal to the local authorities on any
requirement deemed unfavourable during this process. The appeal may be to retain aspects of
the initial proposal or to negotiate the conditions imposed on the initial submission proposal.
In some cases, the town planner would propose several alternatives in order to comply the
requirement under the conditional approval. Therefore, in this situation, the local authority may
consider the appeal send to them and bring forward for further analyse and discussion.
However, there is another consequences if the town planner fail to resubmit the plan as per
time stipulated by the local planning authority, the application may be withdrawn. The town
planner then can resubmit a fresh application to the local planning authority again. These all
are stated in the Section 21(5) of the Town and Country Planning Act.
Apart from that, based on Section 21A (1), there are another additional documents need
to be submit together with the documents and the plans required under Section 21(1). Town
planner needs to submit a development proposal report which shall contain the following;
f) layout plans, the details of which are specified in section 21b; and
In facts, any development that involves land area larger than 50 hectares in size, is
required to be supported by a study on the potential impact it may have on the local
18
___________________________________________________________________________
Another standard compliances include the building setback line requirement for
different building types, for example in this case is referring to the housing type. In fact, the
density, plot ratios, public facilities, retention ponds, supply of electricity (by the National
Board of Electricity) and road levels of the development plans need to be comply with the
requirement too. All planning approvals is subject to the planning permission process referred
to under Section IV, Town and Country Planning Act, 1976 (Act 172). Generally, the local
authorities would only offer an initial conditional approval. The submitting party, that is the
planner appointed by the developer, shall then make the necessary amendments in
compliance with to the requirements stated in the letter of conditional approval issued by the
various technical departments.
Before the introduction of One Stop Centre (OSC), submission for approval was done
separately and in sequence to the authorities involved for example land office, Local
Authority Planning Development, Local Authority Building Development, Local Authority
Engineering Department and any Technical Department. Only upon approval of the layout
plan can the building plan be submitted for approval with the rest of the drawings to follow
suit.
However, with the implementation of the OSC, the town planner has the option to
submit all five (5) drawings, namely the layout plan, building plan, road and drainage plan,
earthwork plan and landscape plan simultaneously at one place. This systematic planning
process have benefited the developers, consultant, town planner and the authorities. It is
imperative that all the town planner and the developer should comply the guidelines, rules
and regulations stipulated in the standard manual drawn by Department of Town and Country
Planning (DTCP) and the Malaysia Housing and Local Government (MHLG) to ascertain a
smoother planning approval process.
19
___________________________________________________________________________
After town planner submitted all the requirements, the application for planning
permission will start to be evaluated by the local authority who is the OSC Secretariat,
pursuance to Section 22 of the Act. Then, the local planning authority shall decide on the
application for planning permission as soon as possible upon receiving it. Besides that, the
town planner also need to make sure that the application for planning permission are
according to the criteria that need to be considered by the local planning authority when they
are evaluating the application. This is because during the evaluation, there are many other
related parties will having discussion and meeting regarding the plans, documents and the
development report sent. In regard to Section 22(2), among the matters that are being
considered due to their opinion expedient or necessary for proper planning permission are;
All of these criteria set up will be followed by the local planning authority due to access
and evaluate the application for planning permission that had been sent by consultant. After
taking into consideration all the above matters, the local planning authority may grant
planning permission directly or subjected to several conditions that they think fit to impose or
refuse to grant planning permission. Preliminary discussions will take place between the
planning consultant and the planning department at the respective local authorities during the
layout plan or planning permission submission process. Here, the planners shall endeavour to
work together with the planning department of the respective local authorities on fulfilling
the checklist requirement prior to submitting a final layout plan for approval. However, there
are conditions stated in the Section 22 (4), where the local planning authority shall not grant
the planning permission if;
20
___________________________________________________________________________
Besides that, another important tool used to manage land development is planning
control, referred to in Part IV of the Town and Country Planning Act (TCPA), 1976 and
planning guidelines. In Section 19, the TCPA states that no person, other than the local
authorities, shall, commence, undertake, or carry out any development unless planning
permission in respect of the development has been granted to him under Section 22
(treatment of application or extended under Subsection 24 (3) (lapse of planning
permission). Therefore, consultant needs to ensure that she fulfill all the requirement needed
in order for her to be easily granted of the planning permission.
After layout plan has been approved and planning permission has been obtained, the
developer can proceed with the process of obtaining bridging loan and end financing.
After obtaining approval for the planning permission from the state authority, the
licenced surveyor will make an application to the land office due to subdivide the land into
individual land property. This is pursuance to Section 304 of NLC which state about how
instrument to be registered, and time from which registration effective. The subdivision can
be done according to the number of housing area constructed as well as the size of the lots
provided.
Applying to the above matter, for example, in this case, there will be 120 titles
obtained from the subdivision of land because the number of housing development lots are
120. These comprise of 40 houses and lots for low cost building, 40 houses and lots for
medium cost building and 40 houses and lots for high end buildings will be build.
21
___________________________________________________________________________
After the layout plan has been approved and planning permission has been obtained,
the developer can proceed with the process of obtaining bridging loan and end financing. The
purpose of obtaining bridging loan and end financing is to ease the developer cash flow
during the construction period.
7.1 Obtaining Bridging Loan & End Financing from Various Financial Institutions
First, the consultant on behalf of the developer will have to apply for bridging loan.
This loan is a type of short term loan which provides additional funding for the development
of the projects usually for a period of two weeks to three years depends on the arrangement of
larger or longer term financing. In other words, the bridge loan is an interim financing until
permanent financing is obtained. It is to ensure the smoothness and the continuation of the
proposed property development project till its completion. One general requirement for
obtaining a bridging loan is collateral. The developer will have to charge the property which
is the 1000 acres land to the bank in order to secure the loan. The loan also will only be
provided if the consultant attached the documents and details together the certificates from
the architects, engineers and quantity surveyors and give it to the bank. Examples of the
certificates are;
22
___________________________________________________________________________
After the approval from the authorities has been obtained, the, the developer can
move for construction stage. In the construction stage, the construction team will start
commencing their works and start to develop the land by construct the buildings and all the
facilities and amenities. However, several steps and measures of construction need to be
focus as follow;
As the next steps after the funding obtained, the developer has to engage with
qualified consultant such as architect, engineers and quantity surveyors in order to develop
and construct the buildings and facilities on the land. Their roles in developing the proposed
project are as described:
Another responsibilities are also includes the zoning and building code management,
determining the material specifications, maintaining quality control by checking and making
23
___________________________________________________________________________
Besides, all the drawings, lay outs and related plans produced by the architects need to
be approved by the authorities involved. For example for the fire resistant lay out for the
building need to be approved by the fire brigade department. This is to ensure that the
drawings, lay outs and related plans produced are fulfil the requirement and the standard
measures of the authority.
In facts, the engineers scope of works can be subdivided into more details as they are
also can be appointed regarding their expertise in the construction project. For example, there
24
___________________________________________________________________________
Hence, all of these parties will also have to tolerate and work together with each other
due to gain a comprehensive and workable project for the development.
As per mentioned earlier, after all documentation regarding to proposed work have
been completed, developer will appoint main contractor through tendering process. The types
of tendering that employer want to choose is depends on nature of contract, complexity of the
construction, expertise needed and several reasons. There are several types of tender
commonly used in Malaysia, i.e. open tender, selective tender and negotiated tender.
In this situation, assuming that the type of tendering that will be used by the developer
is open tender as it has many benefits. This is to ensure that the procurement and works to be
done in fairly manner without prejudice. There are many advantages of using open tender
methods as it allows any interested and qualified contractor to tender. Therefore, it gives
opportunity for an unknown contractor to compete for the work. Not only that, open tender
also allows competitive tender sum as many contractors tendering for one job. Thus, the
developer can choose any contractor that produce the nearest figure of tender sum or the
lowest offer price as produced by the developers quantity surveyors. The following below
are other advantages of using open tender methods:
a) The tender list can be long as too many contractors tendering for one job.
b) Allowing the tender list to be made without bias. Client will obtain the bargain
possible. No favouritism in selecting contractors.
c) Ensuring good competition not obliged to accept any offers.
d) Traditional method of tendering, familiar to all sector of the engineering and
construction industry.
In order to obtain offers from the contractors, the developer will advertises the tender
offer in the local newspaper or any other mediums giving detail and key information of the
proposed works and inviting interested contractor to tender. In the legal sense such tender
notices constitute invitation to treat, a mere request by the employer for suitable contractor to
submit their bids or offers.
26
___________________________________________________________________________
This process often named as evaluation of tender. This involves the selection of a
suitable contractor and the establishment of a level of pricing for subsequent negotiations.
The objective is to select suitable contractor as early as possible and work together with the
professional team and to establish a level of pricing for subsequent negotiation.
The criteria for short listing is normally confined to items such as technical and
financial capability, experience in similar works and extent of resources (manpower, plant
and equipment). When the tender evaluation process done, the employer will send a letter of
intent or intent letter to the contractor, stating the intention to received or hire their works for
the particular projects. Letter of acceptance will be issued to the successful contractor.
In the construction contract, there are two nature of subcontractor which is:
i. Nominated sub-contractor
In this situation, main contractor appointed by the developer as employer will appoint
the subcontractors to do the work on their behalf. As the appointment of subcontractors will
be made by the main contractor, thus it fall below domestic subcontractor. The subcontractors
needed in this project are earthwork contractors and building contractors.
Earthwork Contractors
Earthworks are engineering works created by moving or processing that part of the
earth's surface comprising soil or unformed rock. These materials may be moved to other
locations and transformed into any desired shape for any purpose. Most earthworks involve
machine excavation and fill or backfill. Some of the roles for earthwork contractors are:
a) Site preparation
b) Moving dirt around
c) Excavation services
Building Contractors
28
___________________________________________________________________________
The main contractor can choose any types of tendering process i.e. open tender,
negotiated tender or selective tender to hire or appoint the subcontractors.
A standard form contract is a contract between two parties, where the terms and
conditions of the contract are set by one of the parties, and the other party has little or no
ability to negotiate more favourable terms.
There are many types of standard form of contract commonly used in Malaysia such as:
a) Standard Form of Contract to be used where Bill of Quantities form part of the
Contract PWD 203A (Revision 2007) published by JKR
b) Standard Form of Contract to be used where Drawings and Specifications
form part of the Contract PWD 203 (Revision 2007) published by JKR
c) Agreement and Conditions of PAM 2006 with quantities published by
Pertubuhan Arkitek Malaysia (PAM)
d) Agreement and Conditions of PAM 2006 without quantities published by
Pertubuhan Arkitek Malaysia (PAM)
e) CIDB Standard Form of Contract for Building Works 2000 Edition, published
by Construction Industry Development Board Malaysia (CIDB)
f) and many more.
For this situation, the most suitable standard form of contract to be is Agreement and
Conditions of PAM 2006 with quantities published by PAM. This is due to the nature of the
project which is private project.
29
___________________________________________________________________________
Reflected the standard provisions in the contract form, there are several special
provisions that can be included either to protect the interest of the employer, contractor or
both. Example of special provision is variation of price. Some of the purposes, usage and
advantages of using the Agreement and Condition of PAM 2006 with quantities are listed
below:
Purpose
Usage
Essentially for:
Advantages
9.0 Sales of Developed Properties under Housing Developers and Control Licensing Act
Purchasers of property direct from a housing developer will execute the standard
agreements known as Sale and Purchase Agreement (SPA) as provided for in the Housing
Developers (Control and Licensing) Act 1966(HDA). This Act aimed at safeguarding the
interest of the Purchasers. Basically, there are 2 methods that can be choose for the developer
in order to sell their housing project which are sell then build concept by virtue of Schedule G
and Schedule H and the other method is to build then sell by virtue of Schedule I and
Schedule J.
In this situation, the form used for sales of the developed properties is schedule G and
schedule H. The purchaser can purchase the house from developer during the construction
period. This method or process involve higher risk to be abandon project. These concepts
give more impact to the buyer and more benefit to the developer itself as the buyer only buy
the house based on the plans or the advertisement.
Every Sale and Purchase Agreement for landed housing accommodation (such as
bungalows, terrace houses and semi-Ds) shall be in the form prescribed in Schedule G of the
31
___________________________________________________________________________
Schedule G is for the selling of landed property, which is sold using individual titles.
These titles are then issued to the purchaser. The purchase will need to sign the transfer form,
which are documents from the housing developer to transfer the property to the purchaser.
The purchaser will then have the individual titles in their name.
In most cases, these titles are kept by the banks that have financed the purchase of the
property. Even so, the purchasers name is on the title and nobody can tell otherwise.
Schedule G is the Sale and Purchase Agreement (Land and Building) that need to be fulfilled
b developer and the purchaser within the construction period.
Schedule H is the Sale and Purchase Agreement (Land and Building) that need to be
fulfilled b developer and the purchaser within the construction period. The complications
come when using the Schedule H. Schedule H is for the use for landed properties that are of a
condominium style development. So, you have a high-rise where every unit is actually just a
drawing on a piece of paper that is shown at the end of the purchase agreement.
The unit will always be marked with a highlighter to show that it is the owners
property. Other than that, it will also show all the existing parcel like parking space or any
other building that is sold with the property.
Schedule H will also have this part where the information about common properties.
Common properties will be things or spaces that the purchasers will share with other within
the development. This can be the garden, visitors parking, and can be the corridor, it can be
the other facilities. Those are the common properties that all the purchasers will share. This is
the dynamic of strata living.
9.2 Purchase after the project completed (Build then Sell Concept)
32
___________________________________________________________________________
The content in the form are almost identical with the Schedule G and Schedule H, but
based on build and sell concept of agreement except several clauses or terms of conditions.
The benefits of this concept are that the rights and responsibilities of the buyers and
developers will be stated clearly, while banks and financial institutions are able to fund
projects as there is proof of a sales transactions.
There are few items that could be defined to compare both build then sell and sell then
build concept. In terms of upon signing the Sale and Purchase Agreement (SPA), both
concepts were the same where the buyer will pay 10% of the purchase price. Same goes with
the waiting period for Completion of Construction and Notice of Delivery of Vacant
Possession. The waiting periods for both concepts are within 24 or 36 months or more upon
Architect's Certification of Completion.
Extracting the developers' perspective of the sell then build concept, they mentioned
that the projects which are currently developed could be secured by a pre-commitment by the
buyers. Plus, Other than that, on sell then build concept, the developer could have early data
collection on matters related to demand of the houses constructed, the changes needed as well
as the room for improvement once the selling of the houses project started. More than that, by
using this method, the developer can use the deposited money from the purchasers, normally
10% from the price to be used throughout the construction process.
33
___________________________________________________________________________
After the site possession by the main contractor, he will begin the construction work
within allocated time agreed by both parties which are Rosmah and contractor; Certificate of
Practical Completion will be issued by Architect once the construction on or before the
agreed completion date without any delay and extension of time.
Upon the issuance of Certificate of Practical Completion, the defect liability period
will begin for particular time or period before issuance of Certificate of Making Good Defect
by the Architect. After the architect issued CMGD, they then will issued the Certificate of
completion and compliance (CCC) as they seem fit.
In 2004, the Prime Minister calls for the replacement of the issuance of the Certificate
of Fitness for Occupation (CFO) by the local authorities with self-certification by the
professionals
The Ministry of Works (MOW) and Ministry of Housing and Local Government
(MOHLG) initiated meetings or index study with the industry players to seek their respective
feedback and to prepare proposals for this to be implemented. The study recognised that the
issuance of new certification system called Certification of Completion and Compliance
(CCC) has many strengths and benefits.
Section 3 of the Street, Drainage and Building Act 1974, as amended in 2007, defines
the term certificate of completion and compliance (CCC) as the certificate given or granted
under any by-laws made under that Act. That by-law is the Uniform Building By-Laws
(UBBL).
Under the earlier system, a CFO is issued by the local authority after it has received
Form E (UBBL), which is the relevant application form for the issuance of a CFO. The old
system i.e. CFO is fraught with many problems, especially delay in certification by technical
agencies or other local authority, as well as due to additional conditions being imposed by the
34
___________________________________________________________________________
The CCC system came into effect on 12 April 2007, replacing the CFO which is
Certificate Fitness Occupation. The CFO was issued by the local authority while CCC is
issued by self-certification of the professionals. On other words, CCC is issued by the
housing projects principal submitting person (PSP) who is either a professional architect,
professional engineer or a registered building draughtsman.
Before a PSP can issue a CCC, he must ensure that the works have been completed in
accordance to the approved building plans and following the specifications stipulated in the
contract and that he has supervised the works accordingly. All necessary form must be duly
filled and certified, and the PSP must get confirmation of supply or connection in respect of 6
essential services department:
Under Section 22F (1) of the Housing Development (Control and Licensing) Act
1996, any architect or engineer who issue 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
not less than RM10, 000 and not more than RM100, 000 or to a jail term not more than 5
years or to both.
Subsection 22F (2) provides that any person who knowingly and wilfully aids, abets,
counsels, procures or commands the commission of an offense under subsection 22F (1) shall
be liable to the punishment provided for the offence.
A false and negligent certification of the CCC by an architect is an offence under the
Architects (Amendment) Act 2007 and can constitute valid grounds for disciplinary action,
The defaulting architect can be imposed a fine not exceeding RM50,000 and be suspended
from practise for a period not exceeding 2 years.
The main benefit of CCC system is that when notice of vacant possession (VP) can
be issued simultaneously with the issuance of CCC that is now under the control of
professionals, this will resolve to a certain extend the problems associated by house buyers
who unable to occupied their fully paid house owing to the delay of the issuance of CFO.
Other benefits of introduction to CCC are as listed below:
a) Self-regulation
b) Self-certification
c) Prevent excessive bureaucracy
d) Speed up housing delivery
e) Reduce the cost and time spent of doing business with the government
36
___________________________________________________________________________
After obtaining CCC, this shows that the buildings are now completed and ready to be
equipped. Then, the developer can make application to transfer the subdivided titles (lots) to
the individual purchasers in the Form 14A. This only can be made after the CCC is obtained
because it is one of the requirement needed for the procedure to transfer. Therefore, during
this stage, the developer also had successfully sold the property and received the payment
from the purchaser. The amount of paid depend on the percentage or stages of payment being
agreed upon the agreement made before.
All of these are due to the matter codified in NLC which stated that every transfer
must be effected by an instrument prescribed by Malaysia NLC 1965 as stated under Section
206(1)(a). Under Section 215(1) it specifies that the transfer of alienated land, any undivided
share in alienated land or any lease must be effected by an instrument in Form 14A.
12.0 Conclusion
In order to develop a land, it is need to ensure that the owner understand the process
and procedure of the development. This is due to ensure that the sequences of work and the
progress that will be done run smoothly and did not restricted by any parties. In facts, it is al
so necessary for the owner to deliver the requirements that workable and manageable by the
37
___________________________________________________________________________
REFERENCES
38
___________________________________________________________________________
39
___________________________________________________________________________