“There are no good developers only responsible or wayward developers.”

30/10/2007 Contributed by Gavin Tang
http://www.malaysianbar.org.my/content/view/11895/99/

KUALA LUMPUR, Mon: This was the retort of Chang Kim Loong, Hon. Secretary-General of the National House Buyers Association, to Datuk Eddy Chen, patron of the Real Estate and Housing Developers Association (REHDA) who had earlier stated that the recent legislative amendments to the Housing Developers (Control and Licensing) Act 1966, Strata Titles Act 1985 and enactment of the Building and Common Property (Maintenance and Management) Act 2007 would not severely affect “good developers.”

With his aggressive, staccato-paced delivery and interesting sound bites, Mr Chang left the audience at the session on “Recent Legislative Amendments to Housing Development” laughing out loud. Presenting the house buyers’ perspective on the amendments in direct opposition to the developers’ perspective presented by Datuk Chen, Mr Chang delighted the crowd with his abrasive oratory as watchdog for house buyers in Malaysia.

Whilst welcoming the efforts of the government in attempting to safeguard the rights of house buyers through the recent legislative amendments, Mr Chang voiced concerns with the extent and degree of enforcement despite the laws enacted and that strict enforcement was needed without fear or favour against offenders.

He also highlighted the dangers for house buyers with the extremely high number of abandoned projects to be found nationwide and finished off his session with a flourish by saying “I question the authority, question what the government is doing and not doing and I offer constructive criticism and I think it is a damn incredibly patriotic thing to do!”

Earlier, Datuk Chen had presented the developers’ perspective of the recent legislative amendments highlighting in particular REHDA’s concerns on the issues of statutory termination of a housing project, the removal of the requirement of the developer’s consent to assignment and to the increase in jurisdiction of the Tribunal for Homebuyer Claims to claims not exceeding RM50,000.

Dr Yong Chiu Mei, senior lecturer at the University of Malaya, Faculty of Law dealt with the topic of Assignment of Housing Accommodation Without Separate Title dealing in particular with two main issues:

i. the locus of a purchaser, who has assigned his rights under the sale and purchase agreement for financing the purchase of the housing accommodation, to sue and obtain remedies in respect of matters relating to the agreement; and

ii. the right of a purchaser to assign rights of housing accommodation whether out-and-out (by sub-selling or by way of granting gift) or for the purpose of providing security for obtaining loan, free of the constraint of any requirement of developer consent to effect the assignment, including the payment of any fee in respect thereof.

Dr Yong, in exploring the first issue, dealt with how the Courts had approached the issue of whether an assignment in question is absolute in nature and in such circumstances the court would take one of two approaches: the Nouvau Mont Dor approach or the “purpose” approach.

According to Dr Yong, the Nouvau Mont Dor approach involved the court merely considering the “four corners” of the document of assignment without considering any other documents. The “purpose” approach, on the other hand, was a response by some judges to the injustice occasioned on the purchaser/assignees particularly where the developers had acted in breach of the sale and purchase agreement and now sought to avoid culpability by relying on the purchasers lack of locus to bring a suit against them.

This was done by distinguishing the facts of the case of Nouvau Mont Dor or by adopting the principle in Nouvau Mont Dor but not the actual manner of application or by disagreeing directly with the approach.

The result was the finding of the assignment as one by way of charge or being conditional. This led to a state of confusion and uncertainty due to the various judicial approaches. Dr Yong believed that the government’s reaction to the confusion was to insert a brand new provision to the Housing Developers (Control and Licensing) Act 1966: section 22C which now allowed purchasers to initiate and maintain actions in their names even after they have assigned the rights and benefits of their sale and purchase agreement with the developer to his financier as security for a loan.

Unfortunately, due to time constraints, Dr Yong was unable to further elaborate on the second issue and left the participants to read it as outlined in her handout.

Mr Andrew Wong proceeded to speak on the Strata Titles (Amendment) Act 2007 and the newly enacted Building and Common Property (Maintenance and Management) Act 2007. Succinct and well illustrated, some of the interesting points raised by him was in respect of the new housing development concept referred to as Gated Community Schemes or “GACOS.”

Before the amending act, strata titles could only be issued for multi-storey buildings and single-storey buildings on the same lot. Now, land with buildings of not more than four storeys can also be subdivided into land parcels for the issuance of strata title.

Since a multi-storey building is not required to be in the same lot, the amendment means that the development of up-market GACOS can now be developed.

Mr Wong also spoke on the provisions of the Building and Common Property (Maintenance and Management) Act 2007, in particular the establishment of the Joint Management Body comprising the developer and the purchasers which would be formed in the interim period between the handing over of vacant possession and the establishment of the Management Corporation which would be responsible, among other things, to maintain the common property and keep it in good and serviceable repair, to fix and impose charges for maintenance work, to ensure that the Building Maintenance Fund is audited and to prepare and maintain a register of all purchasers.

Despite overshooting the allocated time of an hour-and-a-half, the sheer breadth and depth of the subject meant that all the speakers were unable to fully expound on their chosen topics and perhaps the Bar Council could find an opportunity to bring back the speakers for further talks in the near future.