HOUSE buyers are advised not to rush to file for claims and compensation over delayed projects, despite a recent Federal Court decision opening up the avenue for them.

Industry players said it was best that affected house buyers consider the current property market conditions first.

This follows the recent Federal Court ruling that the housing controller has no power to grant an extension of time (EOT) to developers to complete their property projects.

The decision means house buyers can sue for compensation from developers over delayed projects.

The National House Buyers Association honorary secretary-general Chang Kim Loong said although the EOT was now null and void by the law, house buyers should consider the slowdown in the property market before taking action.

“House buyers have the liberty to take up action but they must consider the current market situation first,” he told The Malaysian Insight.

“I urge all house buyers to exercise caution because of the current market (situation), where the government is giving stamp duty exemptions and developers giving discounts to encourage sales and all that.

“You must evaluate whether you wish to sue for recovery or not,” he said.

He said while it was best for house buyers to decide on the best course of action for themselves, it was also important to ensure the continuing progress of the property market.

He also urged the government not to in future act against the interests of house buyers by abusing the EOTs under HDReg 11(3).

If discretionary powers are not properly exercised, perhaps it is time to remove it in totality.

Chang said there were instances where the EOT has been extended by as much as 60 months, or five years.

“Your life is going to be derailed. Your plans to get married are going to be derailed,” he said, adding that the EOT for condominiums is 36 months.

“In those five years, you will continue to rent your house and service bank loans. It is unfair to ordinary folk. A lots of event may happen during the elongated waiting period.”

The association said 536 EOTs have been granted the Urban Wellbeing, Housing and Local Government Ministry since 2014.

In a parliamentary reply on November 5, Deputy Housing Minister Raja Kamarul Bahrin Shah said that 93 applications for EOTs had been greenlighted in 2017 and 2018, and 46 as at July this year.

On November 26, the Federal Court held that Regulation 11 (3) of the Housing Development (Control and Licensing) Regulations 1989 that confers power on the controller to waive and modify the terms and conditions of the contract of sale between purchasers and the developer, was ultra vires the Housing Development (Control and Licensing) Act 1966.

It ruled that by modifying the prescribed terms and conditions and by granting the developer the EOT, the controller denied purchasers’ right to claim for liquidated damages (LAD).

The court added that the modification and granting of EOT to the developer does not appear to protect or safeguard purchasers, but rather the developer, and that militated the intention of Parliament. – November 29, 2019.