News: Homebuyers Must Be Consulted Before Gov’t Grants Building Extension to Developers

Apr 3, 2018

A three-member panel from Malaysia’s Court of Appeal unanimously ruled on Friday (30 March) that affected home buyers must be consulted first before the Housing Ministry allows developers to extend the completion time of their residential projects, reported The Edge.

“The decision is a victory to all house buyers,” said National House Buyers Association (HBA) Secretary-General Chang Kim Loong.

“With this decision, buyers now got the right to be heard. The (Housing) Minister must listen to the plight of homebuyers whose plans will be derailed if a development is handed over late.”

This is because prior to the ruling there was no opportunity for buyers to contest or appeal against an extension of time (EOT) granted by the ministry to a developer, he noted.

Malaysiakini reported that the landmark decision will help buyers who will face delays in getting the keys to their completed homes. Notably, the Housing Ministry issued 304 EOTs as of 3 April 2017.

This ruling is the latest in a three-year legal battle initiated against the Housing Ministry and developer BHL Construction by 104 home buyers, who were represented by 12 attorneys. These include lead counsel Datuk Andy Wong, who with the other lawyers, took up the case for free.

In particular, the home buyers applied for a judicial review in July 2016 against the Housing Ministry’s Regulation 11(3), which allows the agency to grant EOTs to developers. The plaintiff also asked the court to scrutinise an EOT issued to BHL Construction on 17 November 2015.

According to Justice Harmindar, who read the ruling on behalf of Justice Datuk Hasnah Mohamed Hashim and lead Justice Datuk Wong Dak Wah, the 12-month extension granted to BHL Construction is invalid, as it was signed by a person named N Jayaseelan instead of the Controller of Housing.

“Since the Minister did not file any affidavit to provide some clarity, the contention that the Minister was not the one who made the decision has merit and cannot be dismissed lightly,” he noted.

Commenting on the ruling, Real Estate and Housing Developers Association (REHDA) Deputy President Datuk Soam Heng Choon said home builders typically ask for a longer construction time upfront from the Housing Ministry. But before this is granted, this request undergoes a rigorous review process.

“There is a caveat, where if there is serious force majeure (like a calamity or typhoon preventing a project’s timely completion), then developers will request for EOT.” But home builders should not abuse it, he added.

Image sourced from Focus Malaysia

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