KUALA LUMPUR: The Real Estate and Housing Developers’ Association Malaysia (Rehda) says developers who have yet to enter into a formal agreement with homebuyers to sell their developments should be allowed more time to deliver the units in the case of delays.
Rehda’s patron and former president Tan Sri Eddy Chen said this in response to a landmark court decision reported by a local daily yesterday that the Housing Controller has no power to grant an extension of time to developers who delay the completion of housing projects.
The decision effectively meant developers have to pay compensation to affected buyers for delays in the delivery of vacant possession.
Chen, who is MKH Bhd managing director and also the Building Management Association of Malaysia president, said Rehda is planning to appeal to the government on the issue to exempt developers who have yet to ink the sale and purchase agreement with the buyers.
“[If the request for more time was made] prior to the launch and the S&P (sale and purchase) agreement, they should be exempted from the judgement,” Chen said.
On the ruling itself, he said property developers have the moral obligation to complete building the houses in the period that was agreed on.
Chen added if there’s a delay on the part of the contractor or supplier, developers themselves should also take legal action against them to get the compensation they deserve, which is what most property developers are doing to claim for late delivery charges or liquidated ascertained damages.
On the current property market slump, Chen proposed for unsold units to be sold to foreigners, as there is a danger of cash flow issues among developers from the slowing sales.
He said while developers can head to the bank for more financing, banks are likely to refuse or add on to the conditions of their loans due to the current slowdown.
“If they (unsold units) remain unsold after six or nine months, the government should waive the RM1 million [minimum price requirement for foreign buyers],” he said. In Selangor, foreigners are only allowed to buy properties priced RM2 million and above, Chen added.
He added that doing so would allow more inflow of money from overseas and even help boost the ringgit too.