Housebuyers seek better remedy

 22/02/2001 The Star  By Sim Leoi Leoi 

PETALING JAYA: Various groups have called for an alternative remedy to enable housebuyers to get a faster compensation from developers in cases of late delivery.

They feel that since it was automatic for buyers to pay late payment charges to financial institutions if progress payments are delayed, a similar legislation should be in place to make developers pay a late delivery penalty without being taken to court.

Consumers Association of Penang president S.M. Mohamed Idris said housebuyers should be allowed to have their last 20% of the purchasing price "discounted'' by contra payments in cases of delayed delivery.

He said this could provide a better alternative to housebuyers than having to resort to legal action.

"Such a discount can be implemented almost immediately once developers go past the due delivery deadlines.

"Instead of having to wait for the developers to pay them a sum, housebuyers can have that value of compensation balance out by a contra payment.

"This will definitely be more effective than waiting for their cases to go to court where they can be burdened further, he said in an interview here yesterday.

This recommendation, he added, was among the proposals his association had forwarded to the Housing and Local Government Ministry, which was looking into the revamp of the Housing Developers Act.

Mohamed Idris was commenting on a statement by Datuk Seri Ong Ka Ting that his ministry would no longer entertain appeals from property developers who sought extensions to deadlines for the completion of their projects.

The developers, added Ong, had resorted to this to avoid late delivery payments to property buyers and also legal retribution from them.

Housebuyers Association secretary-general Chang Kim Loong said that under the sale and purchase agreement, developers were required to automatically pay damages for late delivery.

"But many developers do not adhere to this rule unless the buyers enforce the clause by going to court.

"So, there must be an earnest effort by the ministry to clamp down on these errant developers,'' he said.

Chang also called on the ministry to allow buyers of property worth more than RM25,000 to refer their cases to the housing tribunal, which had been proposed under the revamped Act.

"There have been suggestions that the housing tribunal handles only legal cases involving low-cost housebuyers.

"But if buyers of property above RM25,000 have to go to court to seek legal redress, then this will only further add to the backlog of cases.

"Decisions by the tribunal should also be binding and there should not be any avenue of appeal, except on points of law,'' he said.