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A fair and right judgment, says housing developer

PETALING JAYA: Barry bought a RM1mil property. The developer did not complete the project within the time limit as stipulated in the sale and purchase agreement. Under the law, Barry can claim for late delivery charges, legally known as liquidated ascertained damages (LAD).

“Two months ago, the developer negotiated with us to pay 70% of the compensation, or RM280,000 of LAD. My lawyer who handled my SPA advised me to stand firm on the 100% that I’m entitled to and offered to help me get the full sum of RM376,000,” said Barry, who has yet to receive any payment.

But he is relatively lucky compared to some buyers who have been offered zero compensation.

In fact, in recent times, many buyers have been helpless against developers who have successfully applied to the Urban Wellbeing, Housing and Local Government Ministry to approve an extended deadline of delivery – which means no LAD needs to be paid to buyers.

That was until a landmark decision yesterday where the High Court (Appellate and Special Powers) ruled that the Housing Controller does not have the power to extend the delivery deadline of a property against what is printed in the sale and purchase agreement (SPA).

MKH Bhd managing director Tan Sri Eddy Chen Lok Loi said if the delay is not caused by natural disaster, it is the moral obligation of the developer to pay compensation.

“It is a fair and right judgment,” said Chen, whose company has developed multiple projects in Kajang, Selangor.

Chen said two days ago, the Government extended the completion date for one of their projects. The project was delayed for a month.

“I told my staff that we have to pay. So the moment we hand our keys to the buyers, it will be accompanied by a cheque for the late delivery.

“But this is my company’s stand although the (Urban Wellbeing, Housing and Local Government) ministry has absolved MKH from paying late charges. But I cannot speak for others,” he said.

In the past few years, developers have been applying for an extension of time as a form of “insurance” should they fall behind delivery deadline.

The National House Buyers Association in a statement yesterday said the court’s decision meant that the Housing Controller did not have the power to grant an extension of time, waive or modify the terms and conditions under the sale and purchase agreement.

Datuk Seri Abdul Rahman Dahlan, who was Urban Wellbeing, Housing and Local Government Minister between May 2013 and June 2016, could not be reached for comment.

Related story:

Court: No power to grant extension