We refer to the stand taken by Real Estate and Housing Developers’ Association Malaysia (Rehda) treasurer Muztaza Mohamad that, “any delay (in a housing development project) is not the fault of the buyers. It’s our (developer) own fault or that of other people.”
He had also said “that the developer will have to accept and follow the law even if it means that a six-month delay will lead to a payout of 5% of the gross selling price of the property”.
Muztaza had commented on a landmark High Court decision to set aside the order by a former urban wellbeing, housing and local government minister, giving a 12-month extension to a developer (BHL Construction Sdn Bhd) to complete their housing project, and in effect denying the affected house buyers their rightful compensation from the developer for the delay in the handing over of their new house.
Muztaza went further to state “the law is the law” and that developers should plan ahead to ensure homes are delivered on time.
We, at the National House Buyers Association (HBA), would state further that a contract agreement (in this case the statutory Sales and Purchase Agreement) should be binding on both parties.
The only deviation/alteration that may be allowed is when both parties covenant to alter it, that too, if they are allowed to do so legally.
It naturally follows that the minister, who is an unrelated third party, is therefore not correct by unilaterally and high-handedly altering the date of completion and delivery of said property.
Thus, we feel that it augurs well for the industry when Rehda themselves come out to voice support for the High Court decision.
This should translate into Rehda discouraging its member developers from seeking “Extension of Time”’ (EOT), except when there is a serious and genuine situation, that is totally beyond the developer’s control, such as landslides, floods or other natural disasters.
On the other hand, being issued stop work orders by local authorities due to neighbourhood complaints of disturbances clearly cannot be classified as beyond the developer’s control. On the contrary they are totally self-inflicted.
The fact that the appeal for “Extension of Time”’ (EOT) was even granted in the first place raises a lot of questions.
Why were the affected house buyers made to go through such mental anguish and financial expenditure in pursuit of their rights?
What further compensation should they be given so that justice prevails? After all, they suffered because the minister made a faulty decision.
What penalty should be imposed on him (minister)?
Should the affected buyers now take up another suit to pursue compensation for mental anguish/suffering, the inconvenience caused and other incidentals?
What they achieved this round is only to get back what is rightfully theirs. Who should they now chase to get back any other compensation?
What clout has Rehda to discipline wayward developers from seeking EOT when they are not able to complete their projects?
Will the current urban wellbeing, housing and local government minister ensure that EOT is not high-handedly dished out, such that affected buyers are forced to resort to court actions again?
Goh Seng Toh is vice-president of the National House Buyers Association (HBA).
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Poser over ministerial power to grant extension to developer