News: Developers Allowed to Extend Completion Date Up to 12 Months if They Cannot Complete Development

Oct 10, 2017

Minister of Urban Wellbeing, Housing and Local Government Tan Sri Noh Omar announced that developers can now have the delivery time of their residential projects extended to 48 months from the original 36 months, provided they have not yet sold any units.

“For instance, if you have your advertising permit and developer licence and you realise you might be unable to deliver your project in 36 months, you can appeal to us to extend the project delivery time to 48 months. But if you have sold any of the units, that can’t be done,” he said.

Once a sale and purchase agreement has been signed, the developer must build the property within 36 months starting from the date of contract. Otherwise, the developer may be held liable for late delivery payment or liquidated ascertained damages (LAD) – equivalent to 10 percent of the property price.

His statement addresses the decision issued by the Appellate Court in February that required tardy developers to honour LAD damages to buyers, overturning a previous ruling by the ministry to extend the time period for vacant possession for Sri Istana condominium at Kuala Lumpur to 48 months.

The ministry’s decision had allowed developer BHL Construction Sdn Bhd to evade payment of late delivery compensation to its buyers.

The Real Estate and Housing Developers’ Association (Rehda) had earlier called for the extension, given that stratified properties have become increasingly higher, at up to 50 storeys, plot ratios have increased while construction periods are limited to 9am to 6pm during weekdays.

Concurrent with delivering vacant possession, developers are also required to issue the property’s strata title under the Strata Titles (Amended) Act 2013.

In its recently released survey, Rehda revealed that its members are looking at launching 9,647 units of high-rise homes in the second half of 2017.


Image sourced from NST.


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