BY Roznah Abdul Jabbar
The National House Buyers Association (HBA) is all geared up to take on one of the most important legal battles between homebuyers and the authorities.
The association declared that it will be pursuing legal action against the Controller of Housing (COH) under the Ministry of Urban Wellbeing, Housing and Local Government (KPKT) and the developer of the involved project, called Palace Court in KL, BHL Construction Sdn Bhd.
The decision, said the association, is so it can challenge the existence of Extension of Time (EOT) issued by KPKT to the developer, which has denied unit buyers the rights for entitlement of compensation in the form of liquidated ascertained damages (LAD) for the delay in delivering vacant possession of purchased units.
HBA’s honorary secretary-general Chang Kim Loong said 71 aggrieved buyers have commented class action to challenge the grant of EOT, followed by another group of 36 owners, represented by another law firm who, will also have their case heard on the same date.
To date, HBA and its volunteer lawyers have successfully obtained leave from the the Appellate & Special Power Division of the High Court to pursue with the application for judicial review against the decision.
Chang said the court has directed all parties to file their written submission and the case will be heard before Datuk Hanipah Farikullah on Feb 27, 2017.
On the case, Chang said the issue of “frequent” granting of EOT has been a long-running point of contention, as it has been utilised to the benefit of developers on delayed housing projects on several occasions to the detriment of house buyers.
He said the claim of LAD for late delivery is a well-recognised right and is clearly mentioned in the sale and purchase agreement (SPA) and such rights and entitlements were taken away by the COH of KPKT when the EOT was issued to the developer.
“The granting of a 12-month EOT to the developer effectively extinguishes purchasers’ claims to compensation,” he explained.
The said project, located in Jalan Kuchai Lama and close to the Taman Desa neighbourhood, comprises two blocks of 23-storey apartments totalling 496 units.
According to buyer Darren Ang, the project was supposed to have been handed over to him in May 2015, but there was no communication from the developer about delays or anything.
“In March this year (2016), there was a memo from the developer saying that the LAD claims would be processed for the buyers,” Ang said.
However, in April, the developer informed affected buyers that they would not proceed with claims as they had obtained the EOT from the National Housing Department, which falls under the purview of KPKT.
Ang said that the developer’s intention is doubted, as the letter of approval for the EOT was dated Nov 17, 2015, but they failed to make mention of it even in the March 2016 memo it circulated.
Chang said that the COH has given a 12-month EOT to the developer. This scenario robs all the unit buyers of their rights, benefits and entitlements under LAD for late delivery.
In addressing the case, HBA will be invoking Regulation 11(3) of the Housing Development (Control & Licensing) Regulations 1989 (HDR).
Regulation 11(3) stipulates that the COH has the power to allow modification or changes to the prescribed format provided that the Controller is “satisfied that owing to special circumstances or hardship or necessity, compliance with any of the provisions in the contract of sale is impractical or unnecessary”.
He/she may, by a certificate in writing, waive or modify such provisions – provided that no such waiver or modification shall be approved if such an application is made after the expiry of the time stipulated to deliver vacant possession.
Chang said that the power given to the governing authority, just like other discretionary powers, must not be misused and the COH must understand and be mindful of the purpose of housing legislations so as not to affect such purpose, and undo accrued rights, and make a mockery of Parliament.
He said that in this case, the National Housing Department did not disclose the
grounds on which the EOT was given, nor invite affected purchasers to state their objections.
“No reasonably-minded person, let alone the housing minister and those under his charge, can possibly imagine that the powers given are meant to be used against the interest of house buyers, let alone blatantly take away house buyers’ rights which are expressly and clearly conferred on house buyers,” Chang said.
He added that the Housing Development (Control & Licensing) Act, 1966 (Act 118) and its Regulations, where the statutory forms for contracts of sales are prescribed, have been tweaked and tuned on several occasions.
“Be mindful that it reads ‘An Act to provide for the control and licensing of the business of housing development in Peninsular Malaysia, the protection of the interest of purchasers and for matters connected therewith’,” Chang said.