Buyers told to be wary of housing ads

Buyers told to be wary of housing ads

JAKARTA (JP): Promoting ethics in the real estate business should start with advertisements that do not mislead the public, speakers at a discussion on ethics and the real estate business said yesterday.

"Developers give the impression that they are intentionally misleading the public," Minister of Public Housing Akbar Tandjung said at the seminar.

"People have begun questioning housing advertisements and brochures which they say do not reflect reality," Akbar said.

Many advertisements claim a residential site will be completed with public facilities such as mosques and schools.

However, the public cannot discern between companies which intend to build their own facilities, and those which only provide land for the facilities.

"The brochures or commercials may not be wrong," said Akbar. "But they mislead a public ignorant of the rules."

Under a 1987 regulation, housing developers are obliged to set aside land for public facilities but they are not obliged to build them themselves.

No knowledge of this rule leads consumers to believe that developers have broken their promises when they see the facilities are not yet built, Akbar said.

However, developers do not feel guilty because they have fulfilled the minimum requirements, he said at the talks held by the Indonesian Consumers Foundation.

The 1987 decree also says the government is responsible for building health centers and schools while inhabitants of residential areas are to build their own houses of worship.

As most consumers are unaware of the rules, developers have a duty to provide complete information to the public, the minister said.

Sonny Keraf of the Ethics Development Institute at the private Atma Jaya University said business ethics assume "a high moral standard of every business player."

He said ethics include management responsibility.

As professionals, he said, developers should be ashamed to have imperfect products even if clients don't detect their faults.

Consumer satisfaction goes beyond adhering to a contract, Sonny said.

However, he added, a code of ethics must be supported by laws.

Edwin Kawilarang, the chairman of Real Estate Indonesia, the industry's association, said the rules are still confusing.

"We do not know yet who is responsible for faults found by buyers after the contract deadline of 100 days," Edwin said.

On floods in residential sites, Edwin said a developer cannot be held responsible "if permits are issued to other companies which build residential areas on higher ground." This may lead to floods in areas built earlier, he said.

The chairwoman of the foundation, Zumrotin K. Soesilo, said REI should not evade its responsibility by making excuses.

"Collusion often occurs between developers and officials who issue the permits," she said.

She said advertisements "should ideally serve as reliable sources of information to consumers."

Last year the organization recorded 114 complaints from residents in 100 housing areas, mostly from Bogor, Jakarta, Tangerang and Bekasi.

Zumrotin said studies are still needed to determine the links between the complaints and housing advertisements. (anr)