HBA provides some guidance for using this new forum of dispute resolution between buyers and developers.
The recent amendments to the Housing Development (Control & Licensing) Act, 1966 saw the inclusion of a new Part VI -
Tribunal for Homebuyer Claims. This inclusion gave birth to the Tribunal for Homebuyers' Claim and it was implemented on Dec 1,
The Tribunal Regulations set out detailed but simple procedures for a homebuyer to file a claim against a developer. It
provides a speedier avenue to seek redress and justice instead of undergoing a costly and lengthy court process. In order to
preserve uniformity of laws, the procedures are almost similar to that of the Consumer Claims Tribunal established under the
Consumers Protection Act, 1999.
A "homebuyer" is a purchaser who has bought a property or has a dealing with a licensed housing developer. This also includes
the second purchaser who purchased the property from the first purchaser under a sub-sale. The Tribunal will not hear claims
brought by subsequent purchasers there-after.
Commencement of proceedings
A homebuyer may lodge his claim with the Tribunal in the Form 1 together with the fee of RM10. He may claim for any loss
suffered or any matter concerning his/her interests as a homebuyer against a developer under the Act.
The jurisdiction of the Tribunal shall be limited to a claim that is based on a "cause of action" arising from the sale and
purchase agreement or a previous dealing entered into between the homebuyer and a licensed housing developer. It must be brought
up by a homebuyer pursuant to Section 16N(2) of the Act in the following circumstances:
(a) Not later than 12 months from the date of issuance of the CF.
John signed a sale and purchase agreement for a terrace house in 1997 and the developer was schedule to
complete the construction by 1999. The developer delayed but subsequently completed the construction and handed vacant possession
to the buyer , in the year 2001, yet there was no CF. After protracted delays, the CF was subsequently issued in November 2002.
John is entitled to Liquidated Ascertained Damages until the year 2001 and may submit his claim to the Tribunal not later than
(b) Not later than 12 months from the expiry date of the defects liability period. As set out in the statutory sale and
purchase agreement, the defect liability period is 18 months from the date of vacant possession. Accordingly, a homebuyer can
lodge a claim at the Tribunal not later than the 30 months from the date of vacant possession that is, 18 months (defects
liability period) plus 12 months (specified time frame).
(c) Where there exists a previous dealing between the homebuyer and the licensed housing developer in respect of intended
acquisition of property.
Example: Ramli paid an upfront payment of RM5,000 for his intended purchase from a licensed housing developer. No sale
and purchase agreement has been signed yet. However, a form for an option to purchase had been signed. Ramli, after making checks
discovered that the title deed was not of freehold status contrary to what the developer's sales staff said. Instead, the title
was of 99-years leasehold with 69 years left. The Tribunal will deal with such claims although no sale and purchase agreement has
(d) The Tribunal only hears claims where the monetary amount does not exceed RM25,000 per cause of action. It is immaterial
that the aggregate of all the individual claims exceed RM25,000. The following are some instances of "cause of action" arising
from a sale and purchase agreement.
Compensation for late delivery;
Damages for deviation of plans;
Compensation for adjustment in land area as compared to the measurements in the Agreement;
Omission of works;
Refusing/neglecting to remedy defects, shrinkage or other faults to the building;
Incomplete or non-availability of common facilities (in part or in whole);
Loss or damage of a consequential nature.
Example: Lim has a claim for LAD of RM22,000; omission of works that the developer has failed to conform of a monetary
claim of RM13,000 and a further claim of RM3,500 for remedial works. Each claim for "cause of action" is less than RM25,000 and is
within the jurisdiction of the Tribunal to make award despite the fact that the combined claims is RM39,000.
(e) The Tribunal will hear only claims brought by homebuyers. A developer is not entitled to institute or file any claim in the
Tribunal, but they can raise a counter-claim when responding to the claims filed by the home buyer. The Tribunal will still hear
the counter-claim even if the homebuyer's original claim is later withdrawn or struck off.
Awards of the Tribunal
The Tribunal shall make its award without delay and, where practical within 60 days from the first day of the hearing before
the Tribunal commences. An award of the Tribunal may consist of one or more of the following:
a) That a party to the proceedings pay money to any other party;
b) That the price or other consideration paid by the homebuyer or any other person be refunded to the homebuyer or that person;
c) That interest be paid on any sum or monetary award at a rate not exceeding eight percent per annum, unless it has been
otherwise agreed between the parties.
No legal representatives
No party shall be represented by a lawyer at a hearing unless in the opinion of the Tribunal the matter in question involves
complex issues of the law. In the event, that one party is subsequently allowed to be represented by a lawyer then the other party
shall also be so entitled.
All proceedings before the Tribunal are opened to the public.
Criminal penalty for failure to comply
Any person who fails to comply with an award made by the Tribunal commits an offence and shall on conviction be liable to a
fine not exceeding RM5,000 or to imprisonment for a term not exceeding two years or to both.
Many home buyers usually have little knowledge of what to expect of the Tribunal. HBA is in the process of producing a
guidebook to assist claimants to be conversant with the mechanics of filing a claim with the Tribunal for Homebuyer Claims. This
book is intended as a step by step guide to first time claimants. Watch out for the announcement of the launching.