HBA urges 'incapable' developers to leave the industry

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The National House Buyers Association (HBA) has advised the developers who can't complete their housing projects in time and in accordance with sales contracts to leave the industry.

In a statement today, HBA said most developers can complete their projects within stipulated time period.

"There have also been advances in building technology, which enable housing projects to be completed within a faster period of time.

"Only a small portion of housing projects were granted this arbitrary extension of time (EoT)," HBA said.

"If the developers feel that they cannot complete their project within, say 36 months, HBA's advice is simple: get out of the industry and let someone else who is more capable to take over your project."

"HBA finds in laughable that certain parties can claim that the decision of the Federal Court is detrimental to the housing industry and can cripple the building of new properties," it said.

HBA was responding to lawyer Johan Mohan Abdullah, who was quoted by Free Malaysia Today as saying the housing industry, especially in major cities, could come to a standstill without the flexibility in granting the EoT.

Johan suggested that the government amends the Housing Development (Control and Licensing) Regulations 1989 to allow the housing and local government minister to provide developers with a more flexible time frame to complete their housing schemes.

The lawyer pointed out that some highrise condominiums could not be completed within 36 months and developers ended up paying damages to buyers for late delivery.

Under the government regulated sale and purchase agreement (SPA), housing projects on landed properties and highrise structures must be completed within 24 months and 36 months respectively.

On Nov 26, the Federal Court ruled that the Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989, which allows the controller to waive and modify the terms of the sales contracts between buyers and developers, is ultra vires the Housing Development (Control and Licensing) Act.

That immediately rendered the EoT approved in the past as null and void.

According to two parliamentary written replies on April 3, 2017, and Nov 5, 2019, the Housing Ministry had granted a total 536 EoT from 2014 to July 2019.

HBA said it welcomes the decision of the Federal Court that the Controller of Housing has no power to unilaterally extend the deadline for developers to complete their housing projects.

"For too long, the individual housebuyers have been powerless to challenge the developers due to the deeper pockets of the developers."

"With this decision, there will be a more equal playing field whereby all parties are bound by the terms of the SPA.

"The housebuyers are only asking for the terms in the SPA to be followed and nothing more," HBA added.