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PUBLIC TALK ON NEW HOUSING LEGISLATIONS
PUBLIC TALK ON NEW HOUSING LEGISLATIONS
DEFECTS IN BUILDING…CCC…E0 T BOON ……………..OR …………..A BANE
TURBELANCE IN MALAYSIA PROPERTY MARKET
Defects-Is it a Doom or a Boom???
Preamble
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.
City Investment Sdn Bhd v Koperasi Serbaguna Cuepecs Tanggungan Bhd [1985] 1 CLJ 131
“ having regard to the policy and objective of Act 1966
and the protection afforded by this legislation to house buyers is not merely a private right but a matter of public interest which Parliament has intended to protect”.
Mohamed Azmi J
Completed Building and Plans
14. MATERIALS AND WORKMANSHIP TO CONFORM TO DESCRIPTION
• The said Parcel together with all the common property shall be constructed in accordance with the description set out in the Fourth Schedule and in accordance with the plans approved by the Appropriate Authority which description and plans have been accepted and approved by the Purchaser, as the Purchaser hereby acknowledges.
• No changes thereto or deviations therefrom shall be made without the consent in writing of the Purchaser except such as may be required by the Appropriate Authority.
• The Purchaser shall not be liable for the cost of such changes or deviations and in the event that the changes or deviations involve the substitution or use of cheaper materials or the omission of works originally agreed to be carried out by the Vendor, the Purchaser shall be entitled to a corresponding reduction in the Purchase Price herein or to damages, as the case may be.
"required"
• Ballentine's Law Dictionary where it is stated that when used in a statute, the word "required" may be equivalent to the word "commandered".
• The meaning of the word "required" was considered by the Supreme Court of New Zealand in Edyvane v. Donnelly And Others, [1946] NZLR 263 where Fair J concluded that it means "mandatory".
TAN TIEN SENG & Anor v.GROBINA RESORTS SDN BHD (NO 2)
[2005] 7 CLJ 70
• Further, the changes or deviations must be such as may be "required by the Appropriate Authority", which means that the initiative for such changes or deviations must originate from such authority on grounds of eg, policy considerations in relation to planning and development orders. Hence, changes and deviations which are brought about by the defendant's own amendment or making through the defendant's engineer and architect are in my view outside the scope of cl. 31(b) read with cl. 12.
• Clause 31(b) provides as follows:
• "Appropriate Authority" means any authority for the time being authorisd under any written law in force in West Malaysia to approve buildings plans, subdivision of land, subdivision of building, the issue of documents of title and to enforce any other laws related thereto.
• In my view, the architect or structural engineer employed by the defendant could not come within the scope of cl. 31(b). LOW HOP BING J
1. Lim Sew Lan v. Pembangunan Hysham Sdn Bhd & Anor [1999] 4 CLJ 701,
• The protection or exemption to those clauses take effect only when the alterations, changes or deviations to the building plans are required ie, unilaterally imposed by the appropriate authority.
• In so far as the words "such as may be required by the Appropriate Authority" in cl. 12 are concerned, I am of the view that the changes to or deviations from the building plan would have come within the ambit and purview of cl. 12 if such changes or deviations had been required ie, unilaterally imposed by the appropriate authority but not otherwise, Kamalanathan Ratnam J
CHAN YEW MUN & ANOR v. FABER UNION SDN BHD [2015] 4 CLJ 239 VAZEER ALAM MYDIN MEERA JC
• Whether Developer contractually bound to deliver property with car porch measuring at its promised length
• The Purchaser confirmed receiving a copy of the amended floor plan and had put down his initial in the amended layout plan as an acknowledgement of receipt of the aforesaid plan and not as giving his consent to any amendment to the floor plan; and not least of all to the shortening of the car porch length
• In this regard, there was no agreement in writing by the plaintiffs to vary the SPA to shorten the car porch. The mere initial or signature of the first plaintiff on the amended floor plan, without anything more, could not be taken as signifying the purchaser' consent to amend the SPA and shorten the length of the car porch
Capping Corporation Limited & Ors v. Aquawalk Sdn Bhd & Ors [2013] 1 LNS 574;
• ... there is a written agreement, any variation or termination of the same should be also in written form and in very clear language
YEW HONG TENG & ANOR v. TTDI JAYA SDN BHD [2015] 1 LNS 1114 SEE MEE CHUN J
• Clause 14 of S&P which requires the building to be constructed in accordance with the plans approved by the local authority and no changes or deviations shall be made without the consent in writing of the purchaser. Here it was Plaintiff evidence he did not consent to any amendments. The evidence of PW10 (Director of Building MBSA) was that MBSA did not instruct the changes and DW2 (the architect) had said the changes were ordered by Defendant. The amendment to the building plans amounts to a breach of S&P by Defendant
ALLAN KINSEY & ANOR v. SUNWAY RAHMAN PUTRA SDN BHD & ANOR; DEKON SDN BHD (THIRD PARTY) PRASAD SANDOSHAM ABRAHAM J
• The issue of the certificate of fitness of occupation will point compliance and satisfaction of cl. 14 ie, that the said property had been constructed in a good and workman manner in accordance with the description set out in the fourth schedule of the principal agreement and in accordance with plan approved.
• And I refer to the case of Pentadel Sdn Bhd v. TPPT Sdn Bhd [2011] 1 LNS 1283, wherein Her Ladyship Hadhariah found at p. 6 of her judgment and I quote with approval:
• Under a construction contract, a certificate issued by the relevant authorities
certifying the works had been completed prima facie proof that that the works had been completed.
GOLDEN QUANTUM ACRES SDN BHD v.SSU MANAGEMENT SERVICES SDN BHD [2014] 10 CLJ NALLINI PATHMANATHAN J
• Although the appellant did not complete the works according to contractual specifications, the appellant complied with the provisions of cl. 27. Clause 26(2) provided specifically that if the appellant failed to deliver vacant possession of the villas in the manner stipulated in cl. 27, only then the appellant would be liable to pay the LAD. This meant that the developer must have delayed or abandoned the completion of the property in toto. The clause did not provide a remedy in a situation where the developer, ie, the appellant had completed the works but had done so in a shoddy manner that it failed to meet the contractual obligations
• For a claim for damages arising from a failure of the appellant to construct the building in accordance with contractual specifications, the remedy available to the respondents was the cost of effecting such repairs to meet contractual specifications as well as consequential loss arising for the reasonable time during which the respondents had suffered a loss of use of the villas.
• The respondent was required to mitigate its losses by ensuring that the repairs were effected within a reasonable time. They were entitled to be compensated on the basis of an objective and reasonable estimate of the time taken to effect the requisite works. This was not equivalent to a claim for LAD, although the quantum agreed upon may well be a reasonable estimate for the purposes of determining the quantum per day of delay.
TTDI JAYA SDN BHD v. YEW HONG TENG & ANOR COURT OF APPEAL, [2017] 1 CLJ ASMABI MOHAMAD JCA • If it was true that there was a total failure of consideration, a reasonable
purchaser would have rejected the property at the outset and exerted his rights for a rescission of the SPA and not wait for several years to elapse before deciding to rescind the SPA
• . The plaintiffs did not seem to be satisfied with the rectification of defects by the defendant and had decided to abandon the said property despite the same had been registered in their names. The plaintiffs ought not to have abandoned the said property but to mitigate their losses by engaging their own contractor to rectify the defects and charging the same to the defendant under cl. 25(1) & (2) of the SPA
• We were of the view the High Court had erred in granting liquidated ascertained damages of 10% based on the purchase price of RM476,024 as there was no issue of the property being delivered late
EXTENSION OF TIME
Regulation 11 Housing Development(Control and Licensing)Regulations 1989
"(3) Where 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 impracticable or unnecessary, he
may, by a certificate in writing, waive or modify such provisions:
Provided that no such waiver or modification shall be approved if such application is made after
the expiry of the time stipulated for the handing over of vacant possession under the contract of sale
or after the validity of any extension of time, if any, granted by the Controller".
Housing Developers Rules 1985 • Developer not to seek waiver from purchaser without consent of Controller
• 15.—(1) A housing developer shall not, without the prior consent in writing of the Controller, seek from a purchaser of a unit in a housing project —
• (a) any waiver of the purchaser’s rights under an agreement for the sale and purchase of the unit; or
• (b) any release from the performance of the housing developer’s duties and obligations under the agreement for the sale and purchase of the unit.
• (2) Any undertaking given by a purchaser of a unit in a housing project to a housing developer which seeks to waive the purchaser’s rights or claims against the housing developer for a breach of, or to release a housing developer from the performance of, the housing developer’s duties and obligations under an agreement for the sale and purchase of the unit shall be unenforceable unless the prior consent in writing of the Controller has been obtained.
• (3) Paragraphs (1) and (2) do not apply to any amendment, deletion or alteration to an agreement for the sale and purchase of a unit in a housing project where such amendment, deletion or alteration is permitted under Form 4 or 5 in the First Schedule (as the case may be).
CHUA ENG HONG & ANOR v. PALM SPRINGS DEVELOPMENT SDN BHD [2001] 6 CLJ 298
RK NATHAN J
Having considered the said Regulation, I accept the submission of the appellant that for the
controller to waive the period of 36 months and to give such further extended time as is necessary
the defendant ought to have applied for such extension under reg. 11(3). Unfortunately, the
defendant has not in any of its affidavits provided any evidence that, (a) such application had been
made, (b) that it was made before the expiry of the 36 months, and (c) that the controller had
waived or modified such compliance
The special circumstances referred to in the proviso to reg. 11(3) can mean the doctrine of
frustration.
Hariram Jayaram & Ors v. Sentul Raya Sdn Bhd [2002] 4 CLJ 796
YA Abdul Malik Ishak H
Ought a developer intend to absolve itself from liability arising from late delivery, reg. 11 of the
Housing Regulations provides that an application could be made to the Controller of Housing to
detract from the express provisions of the sale and purchase agreement, owing to some special
circumstances or hardship. Whilst such an avenue was open to the defendants in the present case,
they did not attempt to pursue it."
CHUNG MAY YEN v. PUNCAKDANA DEVELOPMENT SDN BHD [2003] 5 CLJ 12
AZMEL MAAMOR J
I also wish to point out that if it is true that the said project was delayed by reason of the occurrence
of any event as mentioned in s. 9.03 of the said agreement it would be incumbent upon the
defendant to apply for extension of time to complete the said project to the housing development
department. On legitimate reasons the said department would allow an extension of time to the
defendant to complete the project…. In the absence of such extension of time being granted it must
be assumed that the date of the delivery of vacant possession of the said property remained the
same, that is 23 October 1999
TANG KAM THAI & ORS v. LANGKAH CERGAS SDN BHD & ORS [2005] 7 CLJ 86
JAMES FOONG J
On the excuse that the first defendant had written to the Housing Ministry for extension of time to
deliver vacant possession, the court could not accept this as an excuse since exemption is only
effective when approval is granted; not upon application. Until the said Ministry gives such
extension, the time for completion remains as stated in the agreement.
BARTER FORTUNE SDN BHD lwn. TRIBUNAL TUNTUTAN PEMBELI RUMAH
NEGERI PULAU PINANG & SATU LAGI
[2015] 1 LNS 1077 ABU BAKAR KATAR PK
Mahkamah ini berpendapat pemohon yang mengalami masalah yang dibangkitkan itu seharusnya
memperolehi lanjutan masa daripada Pengawal bagi maksud peruntukan Peraturan 11 (3)
Peraturan-Peraturan Pemajuan Perumahan (Kawalan Dan Pelesenan) 1989.
Berdasarkan alasan-alasan yang dinyatakan di atas, Mahkamah ini berpendapat pemohon tidak
boleh menjadikan alasan pihak ketiga yang telah menyebabkan kelewatan penyerahan milikan
kosong kepada responden kedua. Mahkamah ini tidak bersetuju akibat berlakunya tindakan pihak
ketiga dan tanpa kebenaran Pengawal di bawah Peraturan 11(3) Peraturan-Peraturan itu pemohon
menyatakan secara tersirat tempoh masa penyerahan itu dilanjutkan.
TIRAI MAKMUR SDN BHD lwn. TRIBUNAL TUNTUTAN PEMBELI RUMAH
NEGERI PULAU PINANG & LAIN-LAIN [2015] 1 LNS 1070
ABU BAKAR KATAR PK
Berdasarkan alasan-alasan yang dinyatakan di atas, Mahkamah ini berpendapat pemohon tidak
boleh menjadikan alasan pihak ketiga yang telah menyebabkan kelewatan penyerahan milikan
kosong kepada responden kedua. Mahkamah ini tidak bersetuju akibat berlakunya tindakan pihak
ketiga dan tanpa kebenaran Pengawal di bawah Peraturan 11(3) Peraturan-Peraturan itu pemohon
menyatakan secara tersirat tempoh masa penyerahan itu dilanjutkan.
OXBRIDGE HEIGHT SDN BHD v. ABDUL RAZAK MOHD YUSOF & ANOR [2015] 2 CLJ 252
Mohamad Ariff Yusof JCA
In the event vacant possession was not delivered by the new completion date, the respondents
would have been at liberty to sue on the basis of the original LAD provision. It was not a situation
where the purpose of the housing legislation being to protect the weak against the strong was
ousted. In terms of policy, there should be nothing illegal in law for a settlement agreement to be
negotiated with the full participation and direction from JPN. It was done with a view to save a
failing housing project from being an abandoned project. Further, it would be in the public interest
and in the interest of house buyers if the law allowed a regulated settlement and waiver of the LAD
on terms as specified in the settlement agreement
Glomac Kristal Sdn Bhd V Yong Heng Leong WA-24NCVC-730-05/2016 AND 15 OTHER CASES Dato Roslan Bin A.Bakar JC 16 Feb 2017
i. It is absurd for the Controller after having considered and satisfied with the special circumstances or hardship or necessity compliance of the provisions in the sale and purchase agreement, approved the application for the extension of time and then imposed a condition to the approval;
ii. It is the intention of the legislator to be as such.
iii. the need to sign a supplementary agreement is only for the formality or an administrative
purpose to give effect the approval;
iv. the approval give id for the whole project and not limited to the names in Lampiran A only;
v. parties can appeal under Regulation 12, within 14 days after having been notified of the decision and not 14 days after the decision made.
2.Based on those findings, the Court allows the Plaintiff’s application.
3.liquidated damages (if any), need to be paid after the expiry of 42 months.
4.Cost of RM 15,000.00 to the Plaintiff (to be shared by all the Defendants in 15 cases) and
subjected to 4% allocatur.
MAMOTH EMPIRE V TAN AH MOOY AND ANOTHER B-08-553-12/2017 CA (Unreported) 22 3 2018
Conditions attached JPN for Extension of Time
1.Supplementary SPA
2.Project must be completed in 6 months
3.Monthly reporting on status
Leave disallowed
bhl
BHL CONSTRUCTION CASE
The High Court today set aside the order by the urban wellbeing, housing and local government minister to give a 12-month extension to a developer to complete his project. Justice Hanipah Farikullah, who allowed the judicial review application by 104 house buyers, said the minister’s decision to rely on a
regulation to allow the extension was against the Housing Development (Control & Licensing) Act. “The application by the house buyers to quash the minister’s order is hereby allowed,” she said. BHL Construction Sdn Bhd was involved in the construction of a condominium in Jalan Kuchai Lama here where 104 plaintiffs had entered into a sale and purchase agreement with them. One of the conditions of the agreement required that the developer hand over vacant possession within 36 months or be liable to pay a penalty for late delivery to the buyers. The developer failed to complete and hand over the units to the 104 purchasers and wrote to the Controller of Housing under the ministry for an extension of time. The appeal was rejected. The developer then appealed to the minister who, on Nov 17, 2015, allowed an extension of 12 months
27 Feb 2017
DECISION
• The Decision of the Controller suffer from the infirmities of illegality, irrationality or procedural impropriety
• Reg11(3) is ultra vires the Housing Development(Control and Licensing) Act 1966
Can the Developer ask Purchaser to give up his rights to claim LAD ?
City Investment Sdn Bhd v Koperasi Serbaguna Cuepacs Tanggungan Bhd [1985] 1 CLJ 131
“ having regard to the policy and objective of Act 1966 and the protection afforded by this legislation to house buyers is not merely a private right but a matter of public interest which Parliament has intended to protect”.
Mohamed Azmi J
When is the last date for calculation of LAD?
1.Date of VP notice
2.14 days after VP notice issued ie when Purchaser deem to have obtained VP
3.When Purchaser collects the key
EVEREST POINT SDN BHD v. LIM PECK SIM & ORS [2017] 7 CLJ 401 Ramly Ali FCJ To allow the plaintiffs to take their own "sweet time" in taking delivery of vacant possession of the unit consequently seeking to enjoy a higher amount of LAD (despite the issuance of CFO being notified to them), is clearly unjustified and unfair to the first defendant as the developer. The first defendant may be prejudiced and suffer damages for loss and damage to the unit and/or to fixtures and fittings therein if the plaintiffs took too long to take vacant possession; more so if the plaintiffs are allowed to claim LAD for the extended period. This may not be good for the housing industry.
The imposition of LAD is not to enrich the plaintiffs by refusing or delaying to take delivery of vacant possession even though the unit was certified to be safe for occupation and they were duly notified about that. Therefore, the cut-off date for calculation of LAD relating to the late delivery of vacant possession of the unit was 30 May 2011 the date of VP notice
