Professional Documents
Culture Documents
1.0
INTRODUCTION
1.1 Definition of Abandoned Housing Project
1.2 Background of Housing Project
CAUSES OF ABANDONED HOUSING PROJECT
2.1 Financial Problem
2.2 Mismanagement
2.3 Economic Condition
PARTIES INVOLVED IN ABANDONED HOUSING
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2-3
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PROJECT
3.1 Developer
3.2 Consultants
3.3 Contractor
3.4 Financial Institutions
4.0 EFFECTS THAT CAUSED BY ABANDONED HOUSING
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2.0
3.0
PROJECT
4.1 Personal and Company Effect
4.2 Social and Economic Effect
4.3 Environmental Effect
4.4 Country Effect
5.0 CONCLUSION
LIST OF REFERENCES
APPENDICES
MINUTES OF MEETING
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10-12
12-13
14-16
17-20
1.0
INTRODUCTION
1.1
site has been continuously stalled for 6 months or more, whether during the
project completion period or beyond the scheduled date of completion,
according to the Sales and Purchase agreement. Besides that, a developer is
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not able to complete the project, or when the Housing Controller views that
the developer can no longer carry out their responsibilities as a developer
(Source: Monitoring and Enforcement Division).
Abandoned housing projects were first identified in 1983. For the purpose of
rehabilitation, an Abandoned Housing Project Revival Fund was established
by Bank Negara in 1990 whereby Abandoned Housing Project Revival Pvt.
Ltd. was given the responsibility to study and rehabilitate the projects.
In Longman Dictionary defines abandonment as the act of given up an action
on something completely, with no certain intention of when to resume. When
actions and activities on development projects are suspended without any
stated time of resumption the projects are said to be abandoned.
By referring to the Ministry of Housing and Local Government (MHLG),
anabandoned project is defined as an uncompleted project or a project that
underdelaying. Basically, it classified into three categories by the MHLG
where Delay Project, Ailing Project and Abandoned Project.
1.2
2.0
2.1
Financial Problem
The major reason leading to the abandonment of the project was the
financial difficulties faced by Success Villa Sdn Bhd. These difficulties arose
due to the lack of skills, experience, and expertise of the defaulting housing
developer company and the inappropriate selling prices for the units compared
to the costs of construction and unforeseen costs faced by Success Villa Sdn
Bhd.
Increases in project costs due to mismanagement or unfavourable economic
conditions; and, the lack of proper feasibility study to determine the right type
of development and unattractive marketing strategy ultimately affect the sales
and hence lead to the financial problem.
2.2
Mismanagement
Mismanagement happen due to the lack of experience of developers.
2.3
Economic Condition
Unexpected bad economic conditions affect a project in many ways
such as material prices, increase in the cost of financing due to higher interest
rate and lower returns of investment once the project is completed. Financial
problem faced by the developer of Success Villa Sdn Bhd got the problems to
bear the cost of development. However, in the course of the development of
the project, the project failed and was abandoned due their inability to meet
the development and construction costs.
3.0
From research, we found that the cause of the abandoned project are
merely because of the financial problem, mismanagement and economic
condition. But other than those factor, project participants somehow related.
The parties that involved are developer, consultants, contractors and financial
institutions.
3.1
Developer
Developers are often a major source contributor to abandoned housing
projects. The problem usually arises and result abandoned housing project.
(Dahlan, 2008) Developers forced to stop midway through the project when
facing financial problem as fails to secure the targeted demand to break even
due to high or unsuitable pricing of the product and the lack of feasibility
study in choosing the site for development, the type of development, and
precise in supply and demand. The culprit may come from poor planning and
researches as the developers that rush into a development without
comprehensive market study will most likely cause developers stuck in a
project due to poor cash flow. Besides that, developer's insufficient fund or
stops to operate and become bankrupt as the weakness of the company in
financial management.
The project may find failures cause to the developers as it appointed the
inexperience project management consultant PMCs or project managers PMs
to manage the project. The repercussion of the problems would be in
managing a good cash flow of the project and causing the project cost overrun,
insufficient quality control, poor planning causes the manpower, lack of
supervision and coordination, quality of the product is low as always delay.
The developers fail to constantly date the first estimated project cost by
incorrect fixation and causes insufficient fund to pay the contractors interim
certificate claim. Moreover, it will have a case of uncertainty prevails over
payment and timing with implications on the contractor's cash flow; design
changes that may adversely undermine timely delivery of the project; and
interpretations of the contract documents which may lead to disputes and
litigations.
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Consultants
Consultants in a construction project typically consist of architects,
civil engineers, and mechanical and electrical (M&E) engineers. (Hoe, 2013)
Involving the consultant at an early stage of the construction project is often
beneficial for the owner. In fact, a consultant may even be involved pre-design
in order to assist an owner with tasks such as project budgeting and
management,
site
selection,
space
relationships,
and
environmental
3.3
Contractors
The contractor also contribute to result in stopping the project because
Financial Institutions
This is reasonable, as in the economic recession, banks would be
reluctant to grant housing loans to the developers and house buyer as they are
many bankruptcy in the country. This may cause the party difficulties in
getting bank loan as the bank may set the higher qualify and requirement for
grant housing loan to protect its interest as the show business couples with
high gearing ratio of borrowing and less generating profit by banks, traders
and business entitle. The small and medium size developers may face
difficulties to obtain the bridging funds from the bank and finally will cause
them weaker financial capability. Furthermore, this phenomena keeps on
recurring especially during the economic downturn and the inflation rate are
high where it may cause the financial institutions not to approve any loans or
even loans are approved. The charges of interest rate will certainly go up
drastically and high to the developers and when the interest rate increases, it
will cause the management of company operation cost to increase and this will
reduce the developer's profit. Meanwhile, the problem may rise up as the bank
simply approve the claims and without conduct further due diligence
investigations and verifications of the truth of the certificates issued by the
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4.0
referred to the individual party that have influenced by the abandoned project.
When the project is abandoned, the victims that suffer would be fall on the
house buyers because they having monetary loss where there are a monthly
loan repayments and deal with financial institution for the entire abandoned
project. Followed by for those houses buyers who are not capable for
repayment loan they will have a big headache toward the personal financial
which might lead to the bankruptcy. Upon bankruptcy, the image of personal
was no longer good in applying loan from any financial institution or might be
blacklisted.
And for company aspect, same as with the personal impact where while there
is abandoned project mean that the company are not work diligent until failure
or delay in delivery their products hence their company image toward public is
affected because the people who wish to purchase a house will not be purchase
from them due the disappointing to the company. Besides that, when a project
is abandoned is causing a huge in monetary losses therefore the company
might be bankruptcy due to unable to pay the debt left behind by the
abandoned project. Additionally, the company will be blacklisted by the
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also being affected where the abandoned project become the abandoned place
for illegal gambling, drug addict, and homelessness campsite. With this
situation, it is seriously influence the neighbourhood security not matter is in
term of personal or family security because there will be an increasing of
chances in stealing cases by the drug addict and robbery problems by
gangsters.
In additionally, when a project works is abandoned many workers end up in
employment because construction company nowadays normally established in
macro-group and their employee required to run the company as same as in
the macro-group size as well. Therefore, the unemployment rate is increasing
and causes the economic quality of life decrease upon people loss their job.
Furthermore, while the project is being said abandoned there will be left
behind uncompleted or unfurnished building structure and cause negative
aesthetic values, pleasures and contribution toward the public become eyesore
to the vicinity.
At the end, all the social-economic impacts bring out by the abandoned project
has cause the value loss of the area at the same time the value of the property
related to the surrounding abandoned project will be decrease concurrently in
result the market values of the overall market collapse.
4.3
Environmental Effect
Upon left behind uncompleted building structure from the abandoned
project, it promote the habitat for the dangerous animals such as reptiles like
snake and rat, mammals like lion and insect like flies and mosquito. Those
dangerous animals are threaten to the public where snake poison might lead to
people dead and the rat, flies and mosquito may create new diseases which
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lead the public healthy in a poor situation. And yet due to the place it occupied
by those rat, flies and mosquito, it created the air pollution toward public at the
same time where bad smell spread out from the abandoned project due to lack
on maintenance or care of the entire project.
4.4
Country Effect
By gather all the impacts that mentioned of above, it may destroy the
image of our country toward other country where the poor management skill
of our country lead to a lot of abandoned project occurs and follow by those
social-economic impacts and the environment impact which may cause loss in
the tourism sector in Malaysia. In addition, due to the abandoned project that
cause the overall market value collapse will lead to the country economic
collapse as well because too much of unemployment cases in our country.
(Hadi et al., 2014)
5.0
CONCLUSION
In conclusion, it can be said here that the problem of
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where
the
financial
capacity
of
developers preferred.
Enforce the Housing Development (Control and
Licensing) Act 1966 and Regulations relating to
the licensed developers found to have violated
the Act and Regulation decisive action taken by
the prosecution, the compound and blacklisted
housing
developers
and
directors
of
the
time to time.
Control of the Housing Development Account
(HDA) and the audited financial statements is
enhanced.
Developers
who
fail
to
submit
Developers
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unfavourable
economic
condition
and
financial
where
are
personal
or
company,
social-economy,
rehabilitation,
alternative
housing
delivery,
REFERENCES
Dahlan, N. H. M. (2008). The Need To Define Abandoned Housing Project
In Peninsular Malaysia: An Analysis. IIUM Law Journal, 16(1), 85107.
Hadi, A. N. binti A., Salleh, N. H. B. M., & Tan, G. M. (2014). Abandoned
Housing Project:Issues and Challenge. Abandoned Housing
Project:Issues and Challenge, 122.
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APPENDICES
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P
ictures of abandoned house in Taman Mengkibol, Kluang
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DATE
TIME
PLACE
: 17 SEPTEMBER 2016
: 2:00 P.M. 4:00 P.M.
: Library UTHM
Members Apologies:
None
NO
1.0
SUBJECT
Everyone take
part and give a
suggestion
3.0
FEEDBACK
CHAIRPERSON ADDRESS
Chairperson starts the meeting by asking if the members have any
ideas on where to do this project
2.0
ACTION BY
CLOSING
Chairperson reminds everyone to collect information about the
place and ask secretary to make the letter of site visit
Prepared by:
Approved by:
______________________
____________________
(Secretary)
(Chairperson)
MINUTE OF MEETING 2/2016
ENGINEER AND SOCIETY PROJECT
FACULTY OF CIVIL & ENVIRONMENTAL ENGINEERING
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DATE
TIME
PLACE
: 15 NOVEMBER 2016
: 8.00 P.M. 10.00 P.M.
: Library UTHM
Members Apologies:
None
NO
1.0
SUBJECT
Everyone
Based on the
information, the work
were assign.
1
3.0
FEEDBACK
CHAIRPERSON ADDRESS
Chairperson starts the meeting by asking every member to present
the information
2.0
ACTION BY
Everyone aggreed
with the given work
CLOSING
Chairperson ask for report progress in the next meeting
Prepared by:
Approved by:
______________________
____________________
(Secretary)
(Chairperson)
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DATE
TIME
PLACE
: 20 NOVEMBER 2016
: 2:00 P.M. 4:00 P.M.
: Library UTHM
2.
3.
4.
5.
Members Apologies:
None
NO
1.0
SUBJECT
ACTION BY
CHAIRPERSON ADDRESS
Chairperson starts the meeting by asking for the report progress
2.0
Everyone
FEEDBACK
Haziq offered to do
the video and
ikhwan so the slide
CLOSING
Chairperson want to see the work complete before submission
date
Prepared by:
Approved by:
______________________
____________________
(Secretary)
(Chairperson)
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DATE
TIME
PLACE
: 28 NOVEMBER 2016
: 4.00 P.M. 6:00 P.M.
: Library UTHM
7.
8.
9.
Members Apologies:
None
NO
1.0
SUBJECT
ACTION BY
CHAIRPERSON ADDRESS
Chairperson starts the meeting by asking about the work
2.0
Everyone
FEEDBACK
CLOSING
Chairperson give speech and hope everyone do well on
presentation day
Prepared by:
Approved by:
______________________
____________________
(Secretary)
(Chairperson)
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