NO EOT: Developers to pay, if there’s a delay

Late Delivery Developer – Penalty Buyer claims

– Federal Court sides Buyers claim on delay (late delivery).
– Housing controller has no power to grant an extension of time (EOT) to developers.
– By granting EOT, controller has denied the purchasers’ right to claim for liquidated damages.

PUTRAJAYA: Property buyers in Malaysia can rejoice! As decided by the Federal court, property delivery delay/extension excuses from the developers will be met with a penalty as they have no choice but to honour the Sales and Purchase Agreement (SPA) and repay buyers claim on liquidated damages. 

The granting of extensions or modifications to the prescribed terms and conditions in the Sales and Purchase Agreement would deny the buyers from their right to claim for liquidated damages, as shared by Chief Justice Tengku Maimun Binti Tuan Mat.

Her decision has allowed the appeal of 104 buyers that are claiming for liquidated damages against a local developer.

“These modifications and the granting of extensions of time to the developer do not appear to protect the purchasers, which militates the intention of Parliament,” she added.

The judge ruled that Section 24 of the Housing Development (Control and Licensing) Act 1966 did not give any authority for the minister to delegate his powers to the controller to modify the SPA.
The extension of time for late delivery will only determine the payment amount of damages.
The Federal Court upheld the High Court’s decision.

To get the full ground judgement on Federal court’s decision (pdf):

Article first appeared on FMT (Free Malaysia Today), 26 November

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