“They should at least be notified of the developers’ application for any extension of time to complete the projects and given reasonable time to state their views before any decision is made,” Justice Harminder Singh Dhaliwal said, agreeing with the decision of the High Court last year.
Since that right was not given, he said, the High Court was right to rule that the urban wellbeing, housing and local government minister or the controller of the housing division was wrong to give a 12-month extension to BHL Construction Sdn Bhd.
The developer had signed sale and purchase agreements with 104 buyers for the Sri Istana condominium on Jalan Kuchai Lama in Kuala Lumpur.
One of the conditions of the agreement required the developer to hand over vacant possession within 36 months or be liable to a penalty for late delivery.
The developer, who failed to complete and hand over the units to the purchasers, wrote to the controller of housing under the ministry for an extension of time. The application was rejected.
The developer then appealed to the minister who, on Nov 17, 2015, allowed an extension of 12 months.
That decision would have allowed the developer up to 48 months to hand over vacant possession to the buyers.
Aggrieved, the purchasers took the matter to court in 2016.
In their judicial review application, the condo buyers stated that they wanted to quash the decision allowing BHL Construction more time to deliver vacant possession.
They also asked the court for a declaration that Regulation 11(3) was ultra vires of the Housing Development (Control and Licensing) Act.
But the government and the developer appealed against the High Court’s ruling that the controller has no power to grant an extension of time to developers.
The Court of Appeal bench chaired by David Wong Dak Wah heard submissions on March 13 and reserved judgment to today. The third panel member is Hasnah Mohamed Hashim.
In the oral grounds, Harminder said Section 11 (3) of the Housing Development (Control & Licensing) Regulation 1989 allowed the minister to grant an extension of time to developers.
“This is because Section 24 of the Housing Development (Control & Licensing) Act gives the minister the power to regulate the terms of any contract between buyers and developers,” he said.
Harminder said the minister could also delegate his power to the controller to allow developers an extension of time.
However, in the present case, Harminder said there was no evidence presented that the minister had exercised such power or delegated it to the controller.
“It was an officer identified as N Jayaseelan who signed on behalf of the controller to give BHL Construction additional time to complete the project,” he said.
As such, Harminder said, the letter was a nullity and had no effect.
Lawyer Pritam Singh, who held a watching brief for the Real Estate and Housing Developers’ Association, said the court was right to hold that the minister had power to give additional time to developers to complete their projects and delegate his authority to the controller.
National House Buyers Association secretary-general Chang Kim Loong said it was time for the government to amend the act and the regulation to ensure developers took into account the views of buyers if they wanted an extension of time.
“Buyers encounter problems like continuing to service housing loans and pay rental while waiting for the developers to complete their projects,” he said.
He said the minister should not succumb to the demands of developers but should also consider the wellbeing of home buyers.
“The sale and purchase agreement between buyers and developers must be strictly followed and the purchasers must be compensated if there is an undue delay,” he said.
Chang said allowing an extension of time to defaulting developers made a mockery of and defeated the intent and objective of housing laws, which was to protect house buyers.
Lawyers Andy Wong Kok Leong, Viola De Cruz, Koh Kean Kang and Andrew Chan appeared for the house buyers while senior federal counsel Khairul Nizam Mohd Kamal represented the minister.
Counsel George Varughese appeared for the developer.