"Useless" vacant possession, if CF not given
Source: Utusan Konsumer July 2001
 

When a person buys a property, be it a house (landed) or flats or condominium (subdivided), that has not been built at the time he signs the sale and purchase agreement, when should he be able to physically occupy the property?

Buyers are being made to wait much longer than is provided by for by Malaysian law, some even as long as 11 years.

According to the Housing Developers (Control and Licensing) Act 1989, a property buyers should receive vacant possession of the property he has bought only when the construction of the building and the surrounding infrastructure, including roads, driveways, drains, culverts, water mains and sewerage plants to the project area, have been completed. The building itself must be  ready to receive water and electricity supply.

The authority to decide whether construction has been completed lies with the architect of the project, who would provide the certification that states that the property is ready for the issuing of vacant possession.

According to the Act the developer has an obligation to deliver a completed property with  completed surrounding infrastructure within 24 (for landed property) or 36 months (for subdivided property) of the sale and purchase agreement.

If the developer fails to do so then he has to immediately pay the buyer damages, calculated from day to day at the rate of 10% per annum of the purchase price.

In addition, it is also clearly stated vacant possession of the property can only be granted if the developer has applied for the Certificate of Fitness for Occupation (CF) from the district municipal council.

Apparently this provision in the Act is not clear enough, and developers have been taking advantage of the loopholes to get away with delaying the application for CF.

This is because application for CF is not clearly defined in the Act. Is it the whole process of application, which includes getting the endorsement letters from the various agencies like TNB, PBA, IWK, JKR and as such, OR is it the handing in of the application form for CF to the district council with all the endorsement letters from all the agencies already obtained?

Developer must deliver

To avoid any confusion, the law should demand that the developer can only deliver vacant possession when the CF has been obtained.

This means the developer cannot dally over the application for CF, thus making it very necessary for them to take the construction schedule and the quality of the construction work seriously.

If they don't, then they cannot deliver vacant possession and get the full purchase price. In addition they might have to pay the buyers the damages.