Land Lecture HDA – 2/12/2022
How law of housing development protects buyers
Ang Ming Li**** – Fed Court Decision – area is a social legislation – issue of extension of time
Super important to read these cases
HAA does not apply to every developer only housing developers
Important preliminary issues – is the developer a housing developer, is the area housing
development? Wont have HDA if so
Legal duties imposed on housing developers – eg must have developers license – APDL – developer
is permitted to develop certain properties
Developers must open a HDA account – the developers duty to adopt the prescribed SPA – standards
and practices – contracts in which the law has already prescribed – the template contract
The most presecribed SPA:
Clause 27 Schedule H
(1) The Developer shall let the Purchaser into possession of the said Parcel upon the following:
(a) the issuance of a certificate of completion and compliance;
(b) the separate strata title relating to the said Parcel has been issued by the Appropriate Authority;
(c) water and electricity supply are ready for connection to the said Parcel; (d) the Purchaser having
paid all monies payable under subclause 5(1) in accordance with the Third Schedule and all other
monies due under this Agreement and the Purchaser having performed and observed all the terms
and covenants on his part under this Agreement; and (e) the completion of any alteration or
additional work under subclause 15(2), if any.
(2) The delivery of vacant possession by the Developer shall be supported by a certificate of
completion and compliance and includes the handing over of the keys of the Parcel to the Purchaser.
(3) Upon the expiry of thirty (30) days from the date of service of a notice from the Developer
requesting the Purchaser to take possession of the said Parcel, whether or not the Purchaser has
actually entered into possession or occupation of the said Parcel, the Purchaser shall be deemed to
have taken delivery of vacant possession.
See also: Clause 26 of Schedule G
The difference between Schedule H & G? – see Cl. 27(1)(b) & Cl. 28 of Schedule H
Note also: Bedco Engineering & Construction v Tribunal of Housing Purchasers [2017] 1 MLJU 636 –
Court of Appeal (Kuching) - The “date of completion” in a sale and purchase agreement must be
taken to mean the date of “delivery of a completed and habitable building fit for human occupation
together with the certificate of fitness for occupation” issued under the agreement “The mere
delivery of vacant possession of the said property by way of giving notice of vacant possession to the
buyers under cls. 19(1) and (2) was no longer sufficient to constitute completion. The requirement
has now been modified in favour of the house buyers, providing additional G protection from further
victimisation by unscrupulous developers by the insertion of cl. 17(3) which reflected the will of the
contracting parties. (para 42)”
Even if wrong schedule has been adopted, the agreement can still go through – it is the wrong of the
developer if the developer does not follow through
HDA – principal primary act
HDR – subsidiary act
-not used interchangably
HDR – shows what the exact powers are
If adopted wrong form – fault of the developer HDR regulation 1 – tells specifically what form has
developer need to adopt – if that SPA is void? No it can still be given effect to
Examinable topic – can you amend anything in schedule H and schedule G? no as it is a statutory
contract – it needs to be adopted as it is
Usually the developer wants to amend the vacant possession area – extension of time – key idea is
you go to the MEISDA seek the ministers approval – so not fully barred from extension – as having
the extension could alter the purchasers ability to claim losses
Can the parties enter into a contract outside of the housing contract – sometimes developers will –
so long as they do not contradict the statutory contract – then it cannot stand as a collateral
contract – if it waters down or contradicts the original contract
[C] – rights of homebuyers – Schedule H
Clause 4 and 5
Purchase price – manner of payment of purchase price
By the 3rd schedule – agreement by itself is schedule H – as and when the development progresses
then the cert will be given by the architect and then the developer will request payment and then
purchaser must pay portion – idea of progressive payment – when payment progresses then the
payment will be made into teh HDA account
Purchase Price must be made progressively – it is progressive payment based on the third schedule
Caluse 5 – related to regulation 11(2) HDR 1989 – no person or agent and stakeholder shall collect
payment out of schedule G or H.
in the event that – booking fee or downpayment – by right this is illegal – no developer or their
stakeholders may collect fees outside of that schedule – usually traps people by saying its 1% of that
first payment – but it is wrong as the first payment is only the payment you pay once you sign the
agreement
-it is irregular or invalid to take booking fees
Late payment charges
-developer has right and can charge late payment charges – schedule H – clause 10
-eg 10% of what payment stage you are currently in
Default by the purchaser – based on whatever has been paid – the developer can take the late
payment charges from that – developer can forfeit that sum (eg 50% of purchase price) then dev can
forfeit that amount of purchase price
Nobody can force the purchaser to pay – cannot say that, purchasers can be forced – if dev has done
everything according to the agreement – they have all right to terminate the SPA and deal with
house itself and claim late payment charges and forfeit the amount of purchase price
-termination of SPA
Section 8A(1) HDA 1966 – if s8A is satisfied – if at all purchaser wants to terminate the agreement
with the developer eg when 70% of purchasers agree that the developer may delay development –
all 3 must be satisfied for Purchasers to have a unilateral right to terminate SPA at any time
-delays can be protected by falling back to the agreement first – as it gives signals something may be
up – then after refer to outside protection mechanisms
What happens if purchaser exercises their right under s8A – s8A(3) the developer must refund all
monies received from purchaser free of interest within 30 days of termination
Clause 8 in schedule H –
***examinable clauses below!
Clause 25 – time for delivery of vacant possession
Clause 27 Clause 30
Clause 24(1)
Ang Ming Lee – applies retrospectively so developers are bound by the original vacant possession
time
Clause 27 (schedule H) –
Certificate of completion or compliance – clause 27
CFO needs to be met –
CCC is issued by principle of submitting persons
CFO issuing – disparity of quality and belief - a lot of consistency issues even within the same project
– house by house even
-new system was introduce
Delivery of VP – title must also be given so land office must issue the title – title goes to bank first
before you pay off your loan
Land office needs time – once development is ready then given keys first then usually much later the
land office must survey and measure and then only give you the title
Why schedule H reads like this –
Clause 28(1) schedule H – strata title not yet issued
Once superstructure is done they apply for strata title – but land office has not issued it yet – issuing
you the certificate first and will issue the title later – for developer the cert is used to comply by
clause 23 when the developer wants to continue with vacant possession, then get comptrollers
certification as according to clause 28
Delivery of VP – water and electricity supply are ready for connection – infrastructure must it already
be working – eg developers have energised the wiring and worked with the likes of TNB and Syabas
Case law: Hoya Holdings – water must be running, developer must have worked with Syabas, or
onning lights must be possible
Salmah Suleiman – no need for energising – devs job is only to have the infrastructure (meters and
wiring) in place and it is up to the purchasers individually to energise it by going to the relevant
public authorities
VP – clause 27 the issuance of CC, separate issuance of strata title – can be certified in writing by
comptroller
Purchase payment must have already been paid
Any extra work is to be done after the CF is given – strata title means you are bound by the building
plan
Clause 27(3) – developer normally issues letters for when they can collect the keys – if purchaser
cannot collect even if not present – the law still deems the purchaser to have entered into vacant
possession upon the expiration of 30 days and having not come.
Late Delivery of Vacant Possession**
Schedule G – clause 24(1)
Schedule H –
By right clause 24(2) – purchaser can sue for liquidated ascertained damages – in the event where vp
is delievered late, automatically the purchaser has right to demand for damages – as it is a key
agreed point that you would get your house in an agreed amount of time
Letter to give keys may also come with settlement money and news that it will be delivered late
How much can you claim from developer – you can get 10% from purch price day per day from date
of possession
Case law: PJD/GJH – paid booking fees – booking fee payment was argued to be when they agreed to
buy the property and therefor the designated 36 months start from the day before SPA for when to
start counting the margin LADs
COA PJD said seems like SPA but the interest is vested on the purchasers ***(read case)
Not going to interpret the date of SPA, especially if developers are asking for booking fee, and thus
asked for LAD to start (where contract was formed) on day of paying booking fee.
-which contravenes with the literal meaning of the clause so it goes more towards the spirit of the
law
Next week defect of liability