HBA appeals to Federal Court in Kondo Sri Istana EOT case

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PUTRAJAYA (May 14): The National Housing Buyers’ Association representing 104 Kondo Sri Istana homebuyers has presented three appeals at the Federal Court today against the Controller of Housing (Controller) for granting an Extension of Time (EOT) to the developer.

The case was brought by the homebuyers against the Ministry of Urban Wellbeing, Housing and Local Government (KPKT) and developer BHL Construction Sdn Bhd.

HBA was represented by 12 lawyers led by Datuk Andy Wong, who undertook the case pro bono.

Wong told the media that as a general rule, the powers of the Minister may not be delegated to the Controller unless it is expressly provided under the Act.

“Section 24(2) of the Act expressly confers power to the Minister to make regulation for the purpose of prescribing statutory form for the contract of sale.

The Minister is also authorised to prescribe regulation for the purpose of regulating the terms and conditions of the contract of sale between the developer and purchasers.

It is not intended by Parliament to authorise the Minister to delegate the power to prescribe and to control and govern to the Controller,” Wong said in his submission appeal.

Housing Development Regulation Act 1989, Section 24 (2) allows the minister to regulate the contract between the developer and the homebuyer.

To recap Kondo Sri Istana development located on Jalan Kuchai Lama was slated for completion in April 2016 (36 months from the date of the SPA)

However, the developer submitted an application to the Controller of Housing (Controller) for an EOT for delivery of vacant possession (VP) on the grounds that there were complaints by nearby residents, stop work orders issued by the local authorities and investigation conducted on the piling contractor.

Premised on a completion period of 36 months, there was a delay in the delivery of VP of the property in the time frame stipulated in the SPA.

On April 2016, the purchasers received a letter from the developer stating that they were not entitled for liquidated ascertained damage (LAD) as there was an EOT of 12 months has already been granted.

The buyers then filed a judicial review application on July 2016, challenging Regulation 11(3) and also the EOT issued on Nov 17, 2015.

On March 30, 2018, the Court of Appeal ruled that KPKT must give homebuyers the right to be heard before developers are given an EOT to complete a project.

But the bench ruled and disagreed with the Kuala Lumpur High Court, saying that Regulation 11(3) of the Housing Development Regulation Act 1989 was not ultra vires or against the Housing Development Act (Control and Licensing) Act.

The five-member panel today was led by Chief Justice of Malaysia Tengku Maimun Tuan Mat.

Meanwhile, the Attorney General’s Chambers of Malaysia in their submission appeal said that the purchasers’ appeal ought to be dismissed without the need for the government to answer any of the leave questions, on the grounds that the purchasers’ judicial review application is premature as there was no decision made by the Minister and/or the questions of law posed are academic or hypothetical in nature.

It was reported that there were some 304 cases of EOTs issued to developers as at 2017.