Wednesday, February 20, 2002

Easier now to sue developers

New Straits Times
By Carolyn Hong

KUALA LUMPUR, Tues. - Purchasers who have taken a loan to buy an apartment will soon find it easier to sue the developer for breach of contract.

Once the Housing Development Act comes into force, they would not have to get the financial institution involved other than getting its written consent to the suit.

A new provision, Section 22C, was inserted after the court had ruled that purchasers had no right to sue in their own names, as they had transferred this right to the bank. The purchaser would have to make the financial institution a party to the case but the banks may be reluctant to get involved.

The new provision gives the right to buyers to act on their own unless there is a clause to the contrary in the loan agreement. In that case, they would have to get written consent from the bank.

The new Act, which is actually the revised Housing Developers (Control and Licensing) Act, has yet to come into force although it has been passed by Parliament and gazetted.

Lawyer Roger Tan, who sat on the Housing and Local Government Ministry committee to draft the amendments, told the New Straits Times that the new Section 22C has retrospective effect. This means that it will also apply to sale and purchase agreements entered into before the Act comes into force. However, it only applies if the purchaser wanted to bring the matter to court, and not to the Housing Tribunal.

He only has the right to go to the Housing Tribunal with his complaint if the sale and purchase agreement is signed after the Act comes into force.

Section 22C will only apply to those buying homes from housing developers, and not to purchasers of commercial property or those buying from someone who is not a housing developer.

In an article written by Tan and the Ministry's legal adviser Shamsulbahri Ibrahim, distributed to the media to publicise the amendments, it was noted that the homebuyer had lost the right to sue as far back as 1984. The Federal Court then had ruled that the buyer has no locus standi to sue if he had bought the property without title and assigned his rights to the financier. Most borrowers would do that when they sign the loan agreement. Tan said these would usually be apartment buyers as it normally takes years for titles to be issued.

He said there are many cases where apartment buyers had faced difficulties suing the developer over defective workmanship or late delivery.

Saturday, February 2, 2002

More protection for housebuyers

The Star
By Chelsea L.Y. Ng

KUALA LUMPUR: The gazetted changes to housing laws will allow housebuyers to enjoy more protection, ranging from having disputes resolved by a tribunal to enhancement of enforcement up to the stage of issuance of the certificate of fitness for occupation (CFO) and transfer of titles.

The Housing Development (Control and Licensing) (Amendment) Act 2001, gazetted on Thursday, emphasises on preventive measures, better protection for purchasers as consumers and also focuses on enhancing the authorities’ investigation and enforcement powers.

The new Act does away with the exemption of co-operative societies, statutory bodies and agencies under the control of the federal or state governments (which include the government’s housing developers) from its application.

It also creates a new office of Deputy Controller of Housing, who, together with the Controller, can delegate their powers to the local authorities.

Two members of the ministry’s Steering Committee on Legislative Drafting – the ministry’s legal adviser Shamsulbahri Ibrahim and lawyer Roger Tan – said in their joint article on the amended Act that the legislation was a major revamp of the 1966 principal Act which was last revised in 1977.

The Bill for last year’s amendment went through the Houses of Parliament in October and received Royal Assent on Jan 24.

They said the new Act was expected to enhance the enforcement of the provisions in it. There were several other amendments, which focused on the same note.

One requires developers to exhibit “at all times in a conspicuous position in any office and branch office of the licensed housing developer’’ a copy of their licence, advertisement and sale permit and to report to the Controller not later than Jan 21 and July 21 of each year on the progress of their projects. This helps the ministry to monitor the progress of every housing project and to take necessary action to ensure that such a project would eventually be completed.

Another allows the ministry to monitor the progress of handing over of vacant possession in accordance with the Uniform Building By-Laws.

It also allows the Controller to undertake the necessary investigation to ascertain the reason why a particular local authority refused to issue or withheld the issuance of the CFO so that the Controller can take the matter up administratively with the local authority.

Apart from that, the legislation has more ‘goodies’ in store for homebuyers. It gives protection to the last 5% of the purchase sum deposited by housebuyers with the developer’s lawyer pending the handing over of vacant possession, similar to that of monies held in a housing development account. This move ensures that the housebuyers’ monies will not be deemed as part of the developer’s property in the event the licensed housing developer should be declared a bankrupt or his company liquidated.

When contacted, Housing and Local Government Minister Datuk Seri Ong Ka Ting confirmed that the Government had gazetted the new Act.

He, however, said the Act could not be enforced immediately as there were some final fine-tuning to be carried out.

“We are in the process of setting the date of enforcement of the Act,” he added.