By Sin Chew Daily
Property purchase has become the primary objective of many Malaysians. Despite the fact that house prices have been rising steeply in recent years (the country’s property price hike is the world’s ninth highest), many people will still do their utmost to secure a roof over their heads.
The entire process of house buying – from selecting the suitable unit to securing a bank loan and the signing of the sales and purchase agreement (SPA) with the developer – has been highly complicated and troublesome.
Well, if the developer is able to deliver as promised, all the input will eventually be paid off . What if the developer fails to deliver as scheduled or compensate for late delivery? The pressure built within the purchaser is easily doubled, from the financial as well as mental aspects.
The National House Buyers Association (HBA) has since last year received over a hundred complaints from property purchasers in the Klang Valley and Johor that the urban well-being, housing and local government ministry has allowed developers to extend their delivery time from 36 months (as in SPA) to 48 months, resulting in them losing the compensation they should have been entitled to for late delivery.
The SPA signed between the purchaser and developer will normally lay down the conditions both parties must adhere to. If a purchaser fails to pay his dues on time, the developer has the right to charge 10% per annum interest on outstanding dues.
Similarly, if the developer fails to deliver as specified, it must also compensate the buyer accordingly.
Developers of sound reputation will normally do so, but there are some which exploit the existing legal loopholes to apply for an extension of construction work shortly before the deadline, such that the buyer will not be able to move into the new property while not getting any compensation from the developer.
This will particularly impact buyers who have already disposed of their old properties or are currently living in rented premises.
Former housing minister Abdul Rahman Dahlan admitted to having approved the extension of construction periods because if the approval is not granted, house buyers will start chasing developers for compensation and this might send some of them into bankruptcy.
Even if the developers have been given the right to extend their delivery time, we still feel that the minister should have put the public’s interest as a top priority instead of the developers’.
Section 11 of the Housing Development (Control & Licensing) Act 1989 allows developers unable to deliver on time to apply for an extension of their delivery time from 36 months to 48 months.
Developers are also allowed to apply to nullify or amend any section of the SPA. The most controversial part is that developers can do all this without having to notify the purchasers.
This Act has grossly overlooked the consumers’ rights and is totally unfair to them.
There have been endless conflicts of late involving the developers and purchasers, including some that end up in court.
It is absolutely essential for the government to review the existing housing development act in order to closely monitor the developers’ financial capability in executing the development projects while protecting the interests of house buyers.
Sin Chew Daily is a local vernacular publication
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