News: Federal Court Rules Controller Of Housing Cannot Grant EOT To Developers

Nov 27, 2019

The Federal Court has ruled that the Controller of Housing has no power to grant an extension of time (EOT) to housing developers. 

Housing developers lacking any EOT will be required to deliver vacant possession within the prescribed statutory period. If they fail to do so, they will have to compensate homebuyers in liquidated ascertained damages (LAD).

The LAD amounts to 10% per annum of the purchase price and is a kind of compensation given under the statutory contract of sale, reported The Sun.

Read here: What is a notice of vacant possession and how can this benefit me? 

The decision, delivered by Chief Justice Tan Sri Tengku Maimun Tuan Mat, held that Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 was ultra vires of the Housing Development (Control and Licensing) Act 1966.

This meant that the Controller of Housing lacks any power to modify or waive the prescribed statutory contract of sale.

The decision shed light on the appeal made by more than 100 affected unit purchasers of Kondominium Sri Istana against the Court of Appeal’s March 2018 ruling.

The Chief Justice explained that the argument stating the then Urban Wellbeing, Housing & Local Government Minister had delegated the power to the controller to give an EOT decision cannot be sustained, as it would mean Regulation 12 (decision of controller is subject to appeal to minister) is redundant and superfluous.

The decision stemmed from a class action filed in 2016 by the said buyers to challenge the EOT denying their rights to seek LAD compensation, due to the delay in the delivery of vacant possession.

A one-year delay occurred in the delivery of such vacant possession, but the developer held the position that an EOT for 12 months was validly issued.

 

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TS Lim
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Royce Properties
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