Need to explain housing law interpretation

NST 20/20/2004

HUNDREDS of thousands of people buy new houses every year. When the houses are ready they must be handed over to the purchasers. Must developers give the house keys to the purchasers, or can the developers claim that they have delivered vacant possession merely by asking for the final payments (without handing over the keys)?

The Tribunal for Housebuyer Claims ruled in a case in Penang on Sept 27 that it is not necessary for developers to hand over the keys in order to hand over vacant possession. According to the Tribunal this is the law after the 1994 amendments to the Housing Developers Act.

This is a matter of grave concern because handing over vacant possession accords several rights to a developer.

For instance, the developer is no longer responsible for the well-being of the house after the 14-day notice period whether the purchaser has actually taken vacant possession (the keys), or is merely deemed to have taken possession through his default and the keys are still with the developer.

What we know of the 1994 amendments is that they were made to clarify the position on the installation of water and electricity meters, and not on the handing over of keys to effect handing over vacant possession.

Previously, vacant possession had to be handed over with water and electricity supplies connected. The courts held that this meant water and electricity meters had to be installed by the developers before handing over vacant possession.

Amendments were then made to state that vacant possession must be handed over with water and electricity supplies ready for connection, i.e. with supplies available up to the meter points only.

How this can be interpreted to mean that there is no need to hand over the keys to deliver vacant possession baffles us.

Let the Minister of Housing and Local Government clarify on this matter.

This is a matter of great concern to the public.

S.M. MOHAMED IDRIS
Penang