In a statement released today, HBA secretary-general Chang Kim Loong said the class action was commenced by 71 aggrieved buyers in challenging the grant of the Extension of Time (EOT) by the Controller of Housing.
HBA volunteer lawyers, working on a pro bono basis, have taken up the case as public interest litigation.
According to Chang, the EOT has denied unit owners the right to compensation in lieu of the delay in delivery of vacant possession of the units.
“The issue of the ‘frequent’ granting of EOTs has been a long-running point of contention as it has been utilised for the benefit of developers on delayed housing projects on several occasions to the detriment of house buyers,” Chang said.
“The granting of a 12-month EOT to the developer completely extinguished the purchasers’ rights to claim compensation for late delivery.”
Chang explained that under the Housing Development (Control & Licensing) Act 1966, the format for the sale and purchase agreement (SPA) is strictly regulated and must be in a mandatory prescribed form (Schedule G and H), which requires developers to hand over keys to house buyers within 24 to 36 months from the date of the agreement.
“These are the prescribed durations permitted under the statutory form of SPA. No deviation from the statutory form is allowed.
“If the developer fails to complete and hand over the units within the prescribed time, it would have to pay the buyers liquidated ascertained damages (LAD) of 10% per annum X purchase price, a form of compensation agreed upon by both the contracting parties, i.e. purchasers and developer,” Chang said.
“Instead, with a stroke of a pen, the Housing Controller extinguished the rights to claim LAD by granting of the extension.”
The EOT, Chang said, is being frequently used by developers to complete their projects on the pretext of “hardship and special circumstances”, thus depriving house buyers of their claim for agreed liquidated damages for late delivery.
“The Housing Controller must understand and be mindful that the Housing Development (Control & Licensing) Act 1966 is a piece of social legislation and its aim is to protect house buyers.
“The granting of the EOT will defeat such a purpose and undo accrued rights and make a mockery of Parliament,” Chang said.
The High Court has now fixed 9am, Monday, Feb 27 next year for hearing of the judicial review and subsequent submissions in the suit between the aggrieved house buyers (represented by HBA volunteer lawyers) against the minister, Controller of Housing and BHL Construction.