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Tell it to the Judge
01/05/2004 Malaysian Business-Housing & Property By National House Buyers Association of Malaysia

How to bring your case up to the Tribunal for Homebuyer Claims

I signed a sale and purchase agreement (SPA) with a housing developer for a terrace house in January 2000. According to the agreement, the house was supposed to be handed over to me 24 months later. However I only got the notice to collect the keys in January 2003. I wrote to the developer for compensation on the late delivery claims but was given a verbal offer of 30% of what I was entitled to. The company representative also told me that it is their company policy to offer 30% of late delivery claims and if I don't accept it, I might not getting anything at all. Of course, I did not agree after having to pay both the rental for the house I am staying and the monthly loan repayment."

Sounds familiar? Unfortunately, this buyer is not alone in his frustration. There are many more buyers like him who have, at one time or another, felt cheated, confused and helpless. This mental anguish is more easily understood when you consider the enormity of the occasion. Buying a home still represents the single, largest, financial obligation most people will ever undertake. The last thing any house buyer would want is to file a lawsuit over his new home.

The Tribunal for Homebuyer Claims is an avenue for homebuyers to seek legal redress after attempts to get the developers to remedy breaches have been exhausted.

The Minister of Housing and Local Government Datuk Seri Ong Ka Ting recently revealed that as of April 6, 2004, the Tribunal had received 5,178 'reports' from house buyers, of which 2,025 cases have been resolved. The minister also said that most cases involved complaints relating to late delivery claims, defects during the liability period and failure to abide by promises made in the SPAs.

Here are some basic considerations should you choose to seek redress at the Tribunal:

Claimant

The claimant must be a homebuyer who bought a property or had a previous 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 thereafter. All claims must be lodged through a Statement of Claim form  (Form 1) together with a fee of RM10. Developers are not entitled to initiate or file any claim in the Tribunal, but they can raise a counter-claim when responding to the claims filed by the homebuyer. The Tribunal will still hear the counter-claim even if the homebuyer's original claim is later withdrawn or struck off.

Time Limit

The jurisdiction of the Tribunal shall be limited to claim that is based on a 'cause of action' arising from the SPA 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 Housing Development (Control & Licensing) Act 1966 under the following circumstances:

a) Not later than 12 months from the date of issuance of the certificate of fitness.

b) Not later than 12 months from the expiry of the date of the defects-liability period, which is 18 months from date of vacant possession. This means, a homebuyer has to lodge a claim at the Tribunal not later than the 30 months from the date of vacant possession.

c) Where there exists a previous dealing between the homebuyer and the licensed housing developer in respect of the intended acquisition of property.

Claim Limit

The Tribunal only hears claims where the monetary amount does not exceed RM25,000 per cause of action. There is no lower limit. The following are some instances of 'cause of action' arising from a SPA.

  • Compensation for late delivery
  • Damages for deviation of plans
  • Compensation for adjustment in land area as compared to the measurement in the SPA
  • 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 of damage of a consequential nature

In cases where the claim exceeds the limit, the homebuyer is not allowed to split the claim in order to fall within the limit. However, he can choose to waive the excess amount to bring the claim within the jurisdiction of the Tribunal.

Awards of the Tribunal

The Tribunal shall make its awards without delay and, where practicable, within 60 days from the date of first hearing of the dispute. 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 8% 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 entitled.

Proceedings

All proceedings before the Tribunal are opened to the public.

Criminal penalty for failure to comply

Section 16AD of the Housing Development Act states the following:

  1. Any person who fails to comply with an award made by the Tribunal within the period specified therein 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.
  2. In the case of a continuing offence, the offender shall, in addition to the penalties under subsection (1), be liable to a fine not exceeding RM1,000 for each day or part of a day during which the offence continues after conviction.
 

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