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Backdating
the law
04/01/2003
NST-PROP
By Salleh Buang
Probably everyone by now knows that the
updated version of the Housing Developers (Control and Licensing) Act 1966
(with its new name) has been in full force since Dec 1. This was the date
set by the Federal Government for the Tribunal for Homebuyer Claims (the
Tribunal) to start operations.
According to Shamsulbahri bin Ibrahim,
the Housing Ministry's Legal Adviser, all the relevant regulations
mentioned below are also now in full swing. These are:
(a) The Housing Developers (Control and Licensing) (Amendment) Regulations
2002; these new regulations amended and updated the earlier Regulations of
1989, which contained the standard Sale and Purchase Agreements (SPA) in
Schedules G and H.
(b) The Housing Developers (Housing Development Account) (Amendment)
Regulations 2002, which amended and updated the earlier Regulations of
1991.
(c) The Housing Development (Compounding of Offences) Regulations 2002;
this is also new and sets out the offences under the Act which may be
compounded by the Controller of Housing. When offences are compounded,
offenders need not be hauled to court.
Before looking at the Tribunal, let us
see some of the fundamental changes in the Regulations mentioned in (a)
above, to find out to what extent these can benefit the average house
purchaser. The following remarks are not be treated as an exhaustive
discussion of the law.
From Dec 1 onwards, housing developers
need not use the standard SPA (as contained in Schedule G or H) if, at the
time the contract of sale is entered into by the parties, the certificate
of fitness for occupation (CF) has already been issued by the relevant
local authority and the developer is already in a position to hand it
over to the purchaser. This means that the developer can demand full
payment for the house - since the house is ready for occupation by the
purchaser.
The legislative intent is quite clear.
The government is encouraging developers to implement the "build-and-sell"
concept as opposed to the present "sell-and-build" which, in many cases,
caused much grief to purchasers.
From now on, solicitors acting for
purchasers are entitled to receive a complete set of the standard SPA from
the developers free of charge. This privilege, however, is subject to the
solicitor's undertaking to return the document to the developer in the
event that the purchaser refuses or fails to execute it within 14 days of
receiving the document. This new procedure guarantees (and recognises) the
right of the purchaser to choose his own solicitor.
For purchasers buying houses without
titles from their developers, the new Regulations put a cap on the amount
a developer can charge the purchaser as administrative charges in the
event the latter wishes to resell the house to another party. Under the
new Regulations, developers are only allowed to charge not more than 0.5
per cent of the purchase price or RM500, whichever is lower.
As for the new Regulations affecting the
Tribunal, the following points need to be remembered:
(a) The Tribunal only hears claims by purchasers, not developers. However,
a developer faces with a claim from a purchaser is entitled to file a
counter-claim. In such case, even if the purchaser later on abandons his
claim, the developer can still proceed with his counter-claim. Every
purchaser should remember this before deciding to withdraw his claim
against his developer.
(b) The Tribunal can bear a claim if it does not exceed RM25,000 - unless
the parties agree otherwise. If the purchaser's claim exceeds that amount
(and the developer does not agree to have it filed with the Tribunal), the
purchaser has to take his case to the Sessions Court.
(c) The claim must be made in good time - which is not later than 12
months from the date CF is issued or the expiry date of the defects
liability period as set out in the SPA.
(d) Purchasers are expected to conduct their own case, without counsel.
However, in special cases where the Tribunal is of the opinion that,
because of complex issues of law, parties need to be assisted by counsel,
then lawyers may be allowed to attend as well and to represent the parties
(both purchasers and developers).
The main objective of setting up the
Tribunal is to provide a simple and speedy form of justice for aggrieved
purchasers. Opinions are divided as to whether the cap of RM25,000 is
realistic or too low.
Ironically, even today, feelings of
disappointment have been openly expressed. A case in point is the National
House Buyers Association (HBA). Expressing the sentiment of the HBA
recently, secretary-general Chang Kim Loong said: "If the Housing Tribunal
is only accessible to the house buyers who sign their SPA on or after Dec
1, then we can surmise that the Tribunal will not see any action until
problems surface...(much later in the day)..."
I am in complete agreement with Chang.
For me, the only logical inference I can draw with the setting up of the
Tribunal right now is that the government wants to provide a flexible
machinery able to provide immediate relief and remedy to existing
aggrieved purchasers without too much of legal hassle. There is certainly
no point in having a Tribunal now, but whose job is to wait for at least
another two or three years before the first claim can be filed before it.
To sum up, although the Tribunal
commenced operations from Dec 1, 2002, why can't we give it jurisdiction
to hear disputes arising from SPA's signed as far back as Jan 1, 2000 or
even much earlier. Or did someone in the Housing Ministry forget to
consider this point?
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