PROTECTIONS FOR HOME BUYERS

Housing Development (Control and Licensing)

Act 1966 (Standard Protections in the Sale and
Purchase Agreement)
What are the protections for the home buyers
in the S&P agreement provided in HDA 1966 ?
OBJECTIVE
The Parliament made this law for three main
objectives
To check abuses of the new-born housing
industry
To regulate the activities of housing developers
To protect house buyers rights
Buying House
Contract
Mutual Consent
Terms
Exempted Clauses
Voidable Set aside
Breach
When the clauses in the contract
are silent about the protection
and the safeguard for the home
buyers, the Housing Development
Act 1966 does provide the
standard protections for the home
buyers
However, the purpose of the
safeguarding is not necessary to be
included in the sale and purchase
agreement whereby it just a mere
statutory guideline to protect the
home buyers. Therefore, when the
rights of home buyers are abused, the
court can refer to the statute and use
them to protect the home buyers.
Schedule G and H (Sub-divided)
Schedule G:
Basically, schedule G is the
standard sale and purchase
agreement.
- It provides the duties developers;
- The rights of home buyers ;
- The standard procedures and
transaction for home buying.


Duty of Developers
Schedule G:
It always relate prior to the construction of the houses.
The developers duties can be briefly described that to
sell the property free from any restrictions and
encumbrances other than those conditions expressed or
implied affecting the title
Upon the execution of the agreement, not to encumber
the property save with the prior approval of the
purchaser.
The developer also has to undertake that the property
shall be rendered free from any encumbrance
immediately prior to the handing over of vacant
possession of the building to the purchaser.


Duty of Developers
To complete the construction before or at the end of
the completion date
Hand the vacant possession of the house to the
buyer within the period of 24 months while for sub-
divided buildings, the period is 36 months.
The developers also need to provide services:
- waste collection
- cleaning of public drains and grass cutting on the
road reserves
*From the time of handing over of vacant possession
until the same is taken over by the relevant authorities.

Duty of Developers
The developers have a duty to construct the building
in good and workmanlike manner in accordance
with the description set out in the Fourth Schedule
to the agreement and in accordance with the plans
approved by the relevant authorities.
Therefore, if the developers failed to comply with
the duties provided under these schedules, the
home purchasers have their right to claim the
remedy for defect, to set aside the contract, to claim
for reimbursement and to bring a civil suit to the
court.
Duty of Developers
If the developer fails to complete the house within
the stipulated time, the purchaser is entitled to
claim liquidated damages to be calculated from day
to day at the rate of ten per centum (10%) per
annum of the purchase price.
The only issue regarding this matter is that whether
the right claim the damage is exclusive or not and
what happens if the purchaser loses more than that
amount.
Duty of Developers
Limmewah Development Sdn Bhd v Dr Jasbir Singh,
the house which should have been handed over to
the purchaser on 25 August 1981 was only
completed in January 1985.
When the purchaser sued the developer for the
actual loss and expense which he incurred as a
result of the long delay, the trial Judge held that in
view of the remedy provided under the Act, he
cannot recover anything further or beyond it.
The Protections
S.11 & 12 of HDA 1966-
Power of Controller of Licence and the Minister :
According to these 3 situations:
- licensed housing developer becomes unable to meet his
obligations to his purchasers, or;
- Is about to suspend the building operations or;
- is about to carry on his business in a manner detrimental
to the interests of his purchasers
The respected Minister have the power to suspend the
licence.
This situations are always entangled with inbuilt house
transaction
The most common things that happened are fraud and
scamming. Therefore, it is the duty of Controller of
licence to notify the Minister to avoid the detrimental.

The Protections
The statute itself provides that the home buyers
have the rights to seek for claim under a tribunal.
All the procedures and scope of powers of the
tribunal are mentioned in part IV of HDA 1966.
The right to claim is depend to the provision under
the SPA clauses but the scope of the claims can be
extended if there is any additional protection
(clauses) that has been inserted by the parties
before commencing the agreement.