‘Absolutely essential’ for Malaysia to review the Housing Development Act

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Fresh calls for an amendment

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To safeguard the welfare of home buyers, the government should revise some provisions of the Housing Development (Control And Licensing) Act of 1989, according to an article from Sin Chew Daily.

First, developers should not be permitted to invalidate or revise any section of the Sale and Purchase Agreement (SPA) it had signed with home buyers as it is unfair for consumers. This is because these companies are currently allowed by law to apply to make changes to the contract without the need to notify or obtain the consent of the other party.

Moreover, this is not proper as the SPA spells out the terms and conditions that must be followed by the developer and buyer, including the penalties for breaking these provisions.

Section 11 of the act should also be revised as it lets developers unable to build the houses on time to apply for an extension to complete the residential properties from three years to four years.

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The article argued that this is not right because if a buyer fails to make payments for the houses on time, the developer can impose charges as per agreed. Typically, the developer adds a 10 percent interest on the outstanding amount per annum.

Conversely, if the developer fails to complete the houses, the company must indemnify the buyer. But if the Housing Ministry gives them an extension, they will no longer need to provide compensation. This very unfair and would greatly affect people who have already sold their old properties or are currently leasing.

In fact, Malaysia’s National House Buyers Association (HBA) has received more than 100 complaints regarding this matter in Johor and Klang Valley since the start of 2016.

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According to Former Housing Minister Abdul Rahman Dahlan, they gave extension to developers, otherwise these companies might go bust due to the compensation they need pay to home buyers.

However, the article contended that the Housing Ministry should place more importance on the welfare of buyers, instead of big time developers.

Given the aforementioned sections of the Housing Development Act, there had been many conflicts recently between homebuyers and developers, with some ending up in court.

“It is absolutely essential for the government to review the existing act in order to closely monitor the developers’ financial capability in executing development projects, while protecting the interests of buyers,” it added.

This story originally appeared on PropertyGuru.com.my on 16 February 2017.

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