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.
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