Protecting house buyers' interest

Real Estate Tips: What To Inspect Before Buying A House

I REFER to the reports “Court: No power to grant extension” and “A fair and right judgment, says housing developer” ( The Star, Feb 28 - Developer has to compensate buyers for delays of projects, Court says).

The High Court decision declaring as ultra vires (beyond one’s legal power or authority) the Housing and Local Government Minister’s granting of a one-year extension of time (EOT) to developers to complete a delayed housing project and thus denying house buyers liquidated and ascertained damages (LAD) provided for under the sale and purchase agreement is timely, sound and indeed meritorious. It is hoped that the decision would be maintained should the minister decide to appeal it.

The Housing Development (Control and Licensing) Act 1966 was enacted for the protection of home buyers.

The long title of the Act (paragraph stating Parliament’s intent for the Act) says: “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...” This makes clear that the housing development business is regulated to ensure that the protection of home buyers’ interest is paramount.

Two eminent judges, the late Tun Mohamed Suffian, former Lord President of Malaysia, and the late Tan Sri Lee Hun Hoe, the longest serving Chief Justice of Borneo, stated this in two landmark cases respectively.

Suffian LP (Sea Housing Corporation v Lee Poh Chee): “To protect home buyers, most of whom are people of modest means, from rich and powerful developers, Parliament found it necessary to regulate the sale of houses and protect buyers by enacting the Act.”

Lee Hun Hoe CJ (Borneo) (Beca (Malaysia) Sdn Bhd v Tan Choong Kuang & Anor): “The duty of observing the law is firmly placed on the housing developers for the protection of house buyers. Hence, any infringement of the law would render the housing developer liable to penalty on conviction.”

Respectfully, it is submitted that the decision to grant the developer of a housing project extension of time and thus deny the home buyers’ statutory rights to LAD ought to be exercised with diffidence. The decision, if any, ought to be made with the Act’s long title in mind, namely, “for the protection of interest of purchasers”.

In doing so, some aspects to consider are:

> In granting EOT, how will home buyers’ interest be protected?

> LAD is agreed monetary payment for home buyers’ losses for delay in completion of a housing project. Is denying home buyers’ the LAD by the EOT tantamount to protecting their interest?

Although Section 11(3) of the Act states that the developer under “special circumstances” may apply to the Controller of Housing for EOT, it is submitted that Parliament and the long title of the Act surely did not intend LAD to be wiped out by “a stroke of a pen”.

To avoid doubt, “special circumstances” would mean act of God or natural disaster, for example earth quake or tsunami, and not business or economic related challenges or hardship.

The above view would make legal sense of Section 11(3).

Again, the High Court decision is lauded.

Home buyers’ interest is of paramount importance under the Housing Development (Control and Licensing) Act 1966. The Controller of Housing’s or Minister’s decision, although seemingly made “by a stroke of a pen”, must materialise or recognise this intent. Failing to do so would be ultra vires the Act.

May the redeeming light of the Housing Development Act (Control and Licensing) 1966 continue to shine effervescently and protect effectively home buyer’s interest for many years to come.

This letter is dedicated to the National Housebuyers Association, its great team of lawyers, professionals and volunteers for their sterling and pro-bono efforts to speak up for and preserve home buyers’ interest.

Source: ROBERT TAN,  Home buyer and author of Buying Property From Developer: What You Need To Know And Do, Petaling Jaya

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Developer has to compensate buyers for delays of projects, Court says

 

Take them to task: According to the liquidated damages clause, condo buyers can claim 10 per annum of the purchase price for the delay

KUALA LUMPUR: The Housing Controller has no power to grant an extension of time to developers who delay the completion of housing projects, the High Court has ruled in a landmark judgment.

This means a housing developer has to pay compensation to the affected buyers for delays in the delivery of vacant possession.

High Court (Appellate and Special Powers) judge Justice Hanipah Farikullah also held that the regulation which empowers the Controller to modify terms of the contract of sale was ultra vires the Housing Development, Control and Licensing Act.

The judge said this in allowing an application for judicial review by 71 buyers of the Sri Istana condominiums in Old Klang Road against the Housing Controller and Urban Well-being, Housing and Local Government Minister.

Their lead counsel Datuk Wong Kok Leong told The Star the judge held that the minister’s decision to grant the developer an extension of time to complete the project via a letter dated Nov 17, 2015 was invalid.

In the letter, the minister had granted the developer a 12-month extension to complete the project.

“This means that the Housing Controller has no power to grant an extension of time to housing developers for any delay in completing their projects,” Wong said.

“Now, the developer has to pay the liquidated damages (a pre-determined sum) for late delivery of vacant possession of those condominium units.”

Wong called the decision a landmark judgment as many project developers seek extensions to complete their projects in Malaysia.

“This is a victory for all house buyers. With this ruling, the housing developer can’t just go to the Housing Controller for an extension of time to complete the project in order to avoid paying the liquidated damages to house buyers.

“This is because if an extension of time is allowed, house buyers lose their rights to claim damages for late delivery of vacant possession,” he added.

Wong explained that according to the liquidated damages clause, the condo buyers can claim 10% per annum of the purchase price for the delay.

In their application for judicial review, the condo buyers stated that they wanted to quash the decision allowing BHL Construction Sdn Bhd an extension of time for the delivery of vacant possession from 36 months to 48 months.

They also asked the court for a declaration that Regulation 11(3) was ultra vires of the Housing Development Act (Control and Licensing) Act.

Wong said the judge has ordered the parties to address the issue of costs on the next date for case management.

When contacted, SFC Mohamad Rizal said the judge also allowed a similar application involving another group of condominium buyers involving the same developer and project.

Source: By  m. mageswari, royce tan, thean lee cheng, andeugene mahalingam, The Star

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Police must act swiftly

Several recent crime cases have shaken Malaysians quite a bit. We leave it to our police force to provide answers to this madness.

RECENTLY, several widely reported crime cases, which many Malaysians are following, have really shaken us.

Yes, Malaysians complain a lot, and rightly so, about the never-ending burglaries and snatch theft cases in our neighbourhood and streets but these are merely incidents involving petty criminals.

Yes, we lose money and sometimes, there are fatalities involved but most are non-brutal and the motives are established quickly. I am not even talking about the high profile assassination of Kim Jong-nam, the exiled half-brother of North Korean dictator Jong-un, at the KLIA2 which has grabbed the world’s attention.

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The police have been swift – two women who committed the crime were arrested and other suspects were taken in while more North Korean suspects have been identified.

There has been plenty of noise from the North Korean embassy but the case is being wrapped up, with fresh leads being revealed to the public daily.

But what has disturbed me most is the disappearance of Pastor Raymond Koh Keng Joo, who is well-known among the Christian community in Malaysia.

It has been reported that on Feb 13, occupants of a van stopped the pastor’s car, a silver Honda Accord, along Jalan Bahagia, Petaling Jaya, and abducted him.

 

(Left) Koh: Abducted in broad daylight. (Right) Sameera: Brutally murdered.

He had earlier left his Prima Sixteen Chapter Two home in Jalan 16/18, Petaling Jaya, at about 10am to go to the Puncak Damansara Condominium in Kampung Sg Kayu Ara, not far away. Koh’s family said the 62-year-old was en route to a friend’s home.

So far, there has been no ransom demanded or motive identified. We still don’t know the reason for the kidnapping.

A CCTV footage, currently with the police, purportedly showed the abduction taking place on a busy road.

It is believed that the pastor’s abduction involved several vehicles. It was professionally and very swiftly executed.

The case is under the personal attention of Inspector-General of Police Tan Sri Khalid Abu Bakar, who announced that a special task force has been formed to investigate the case, saying police had recorded statements from eight witnesses but admitted that there had been little information to go on.

The team is led by Selangor Criminal Investigations Department chief Senior Assistant Commissioner Fadzil Ahmat.

The case is most baffling. Ours is not a South American or Middle Eastern country where people get abducted from busy streets.

The abductors appeared to be very organised, almost professional-like, in carrying out their task. One of them even diverted traffic while others grabbed Koh.

The fact that they have not demanded any ransom shows that they are not ordinary kidnappers looking for money.

The only possible answer is that some persons (or group) are not happy with the way he is handling his work. Koh’s colleagues have revealed that a bullet was sent to the pastor six years ago after the Selangor Islamic Religious Department (Jais) conducted a raid on a thanksgiving and fund-raising dinner organised at a church in Petaling Jaya, where he was accused of proselytising to Muslims.

Religious leaders of any faith must be mindful that attempting to convert anyone is really crossing the line. The majority of Muslims will not tolerate any attempt of proselytising, even in the most subtle form, and leaders of other faiths must understand and accept the sensitivity and reality of the situation.

However, any grievances or complaints relating to religion, a sensitive issue, should be directed to the religious authorities and police. In this case, the pastor was snatched away with no obvious clues, and no claims have been made.

This is distressing, and his wife has understandably sought counselling in Singapore as the family agonises over the unexplained incident.

In the absence of any information, this has led to speculation and it is unhealthy for Malaysia as we take pride in our religious diversity and tolerance in resolving conflicts.

The other widely talked about case involved transgender Sameera Krishnan, who was brutally murdered on Thursday. She was shot, had four fingers severed and suffered head injuries.

The cruelty inflicted on her was horrifying and something Malaysians just cannot imagine. Interestingly, Sameera was the main witness in her own kidnapping case two years ago and the trial has been set to begin early next month.

In 2015, she was rescued by police after she was abducted from her home in Klang, and repeatedly sodomised.

Enough. Malaysians must stand up and demand for justice. While Malaysia does not condone LGBT (lesbians, gays, bisexual, and transgender), this does not mean Sameera’s life is worth any less than ours. It doesn’t matter whether we refer to Sameera as him or her.

The fact is this – she was murdered and sexually violated. Her pride and dignity were snatched away from her and despite the prejudices of many Malaysians, this should not, in any way, diminish the diligence and commitment needed to solve the crime.

Her perpetrators must be brought to justice and if we have any conscience at all, we should all be furious. It will be abnormal to be indifferent about this. Sameera deserves justice, just like anyone else.

I believe that Malaysia is a country where minorities are protected. There are laws in our country and they are upheld.

The police have been professional, and I believe and respect our police force. They take every bit of information seriously and in my regular dealings with them, I have developed even more respect for them. They trudge on diligently despite their impossibly heavy work load.

I hope they will bring some sense and provide us answers to the madness and along the way, some reassurances to the public.

On The Beat By Wong Chun Wai The Star

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group's managing director/chief executive officer and formerly the group chief editor.

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Investing in property to let may not be a good idea

Buy-to-let investing just became a very, very bad idea - The Spectator

Buying to rent may not be a good idea

RENTING out a house or apartment used to be a source of income that would help to pay back the loan instalment or increase one’s available income.

Today, this is no longer a good idea, particularly for those whose income is just enough to meet their needs in the near- or short-term. This is because many people have become less honest.

Those who buy a property with the idea of renting it out may find themselves dealing with a delinquent tenant. To illustrate the situation, I reproduce part of a letter from a reader who is having sleepless nights.

“I have rented an apartment to a Bangladeshi family for a monthly rent of RM900 for several years without a written tenancy agreement. The rental payment went on smoothly until roughly nine months ago, when the tenant started delaying payment of both rental and water.

The rental and water payment was owed several months. Every time he said he would pay, but ended up not paying. He now owes me more than three months rent and more than six months water and has refused to move out, saying he needs time to find a place.

What can I do to get him out, if he continues staying without payment? People have advised me to lodge a police report and get the Rela to forcibly move him out. Is it legal to cut off the water and/or force the tenant out?”

To start with, it is legally wrong to disconnect the electricity or water. Once rented out, the tenant acquires a special kind of right to be on the premises.

A breach by him allows the landlord to terminate the tenancy. Thereafter the tenant becomes liable to pay double rent. The landlord should get a court order to evict him. I don’t think making a police report or approaching Rela will help.

This does not go very far in hel­ping the reader, but what I have to say could help readers who are renting out their property of the type referred to, or who are planning to do so.

Such a person should consider carefully whether he has sufficient spare funds if he is taking a loan. If he is a cash buyer or has resources to pay the instalments then it is fine.

This is because rent will not roll in immediately once the property is ready. There will be a need to spend time and money on putting in some basic fixtures. Time may be required to find a tenant.

In the meantime, the loan instalments will become payable and if he is unable to pay, these will add up and attract penalty interest, increasing the amount of the loan. There will be an added problem if the tenant is only able to pay rent which is less than the instalment.

So what could a landlord do to safeguard himself? The landlord should have a written agreement, and should require at least three months’ deposit at the outset and one month’s rental in advance, with the rental to be paid on or before the seventh day of each month, if not earlier.

Breach of these requirements would entitle the landlord to terminate the tenancy forthwith and require vacant possession.

Once the landlord has put himself in this position, he must monitor the payment of the rent. The tenant may pay late, but the landlord must not keep quiet. When there is a delay in payment but he pays within the month, you must give him a warning that the late payment is a breach.

The need to do this every month is important, because if the landlord allows the tenant to do this repeatedly, the law may regard this as acquiescence and a waiver by the landlord of the obligation to pay on the stipulated date.

If the tenant has not paid for two months the landlord should, by the middle of the second month, terminate tenancy and ask him to vacate the premises. At this stage the landlord has one and half month’s deposit, which allows him to have time to take meaningful action against the Tenant.

Chances are that if the landlord proceeds with such promptness, the tenant will come forward and resolve the matter.

As a term for allowing the tenant to stay on, the landlord could require the tenant to pay the legal costs. In such an event, the tenant would in future pay the rent regularly or he would leave, allowing the landlord to let the premises to another tenant.

Going to court can be costly, but the landlord should not just give up. He should approach a lawyer who can help him with the problem. Not all lawyers are out to make big profits from every client. Some lawyers will even do it for a very low fee, just to help the tenant.

Going to court will look harsh and is something that the owner may not like to do. This is because, at the point of renting, tenants project themselves as very decent and nice people who have every intention of paying the rent promptly. The issue here is: does the owner want his rent to be paid?

If the owner wants to be kind, then the tenant is likely to take advantage of him and drag on the non-payment. Of course, if the landlord is so inclined, he must be prepared to pay the price for being nice.

Law For Everyone By Bhag Singh The star

Any comments or suggestions for points of discussion can be sent to mavico7@yahoo.com. The views expressed here are entirely the writer’s own.

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Retrenchments ahead, says Malaysian Employers Federation

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The Malaysian Employers Federation (MEF) believes that more people will get the axe this year due to the current economic challenges.

Apart from the weak economy, contributing factors include the introduction of “disruptive technology” in some industries, it said.

According to its executive director Datuk Shamsuddin Bardan (pic), economic challenges would see bosses reviewing their workers’ requirements.

“I think slightly more workers will be retrenched this year,” he told a press conference after the Taxation and Employer seminar jointly hosted by the Inland Revenue Board and MEF yesterday.

Shamsuddin said in 2015, about 44,000 workers lost their jobs while up to September last year, about 40,000 workers were retrenched.

He said the complete data for 2016 has not been released by authorities yet, but the numbers could be higher than the previous year.

In 2015, said Shamsuddin, about 18,000 of those who lost their jobs were from the banking sector due to the introduction of what he termed as “disruptive technology”, where banks were increasingly adopting online transactions, for example.

Other industries that could be affected, said Shamsuddin, include insurance, manufacturing and construction.

He said for the insurance industry, many prefer dealing with the companies directly for their services, which makes the job of middlemen or agents, redundant.

“However, these agents are not really part of the retrenchment rate because they are considered to be self-employed,” he said.

Asked to comment on the E-kad (enforcement card) programme by the Immigration Department, Shamsuddin said the Government should consider widening the criteria.

He said the programme should be open to illegal workers who do not have permanent employers.

Currently, only illegal foreign workers with valid employers can register and legalise their work under the E-kad programme.

Shamsuddin said by including illegal foreign workers without employers, the source pool for workers can be widened.

By Hemananthani Vivanandam The Star/ANN

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