Of failed promises and inadequate consumer protection


DO small businesses have a chance of getting a fair deal against big property developers-cum-owners? Will billings based on a “share-unit” calculation be abused to favour developers? Will consumers be adequately protected against developers’ failed promises? These are some of the pertinent questions currently faced by purchasers of mixed-development properties in general and Sime Darby Brunsfield Damansara Holdings Sdn Bhd (SDBH) at Ara Damansara, Petaling Jaya, in particular.

On August 28, a group of about 150 purchasers of SDBH’s properties – Oasis Square and Oasis Corporate Park – demonstrated against the developer. The main contention had been the developer’s recent decision to impose parking fees for all unit owners of the said properties.

Owners, who are mostly small business people, claimed that at the time of purchase they were verbally told each unit would have “free allocated parking”.

True to its word, owners at Oasis Square had been allocated a parking slot for each unit purchased and enjoyed free parking since occupation of the mixed-development properties more than eight years ago. Meanwhile at Oasis Corporate Park, owners had just been informed that parking charges would be imposed.

SDBH management decided to impose parking charges on the basis of the Sales and Purchase (S&P) agreement, which stated: “The Vendor shall grant a right to use a unit of car park to the Purchaser so long as the Purchaser remains the beneficial owner of the said Parcel upon terms and conditions to be fixed by the Vendor (Clause 7.5).”

The perspectives of the purchasers are:

1. They were verbally told upon purchase that each unit would be entitled to a free car park space.

2. They are still the original owners and the purchase was not through sub-sale.

3. Clause 7.5 of the S&P, though not specifically mentioning “free”, is implied to be free parking.

4. They have been enjoying free parking over the last few years, and those from Oasis Square even enjoyed allocated parking slots.

Owners of both mixed-development projects contended they had never been told by the developer that there would be parking charges until early this year, which sparked verbal protests and disagreements raised during Joint Management Committee (JMC) meetings.

Even if the developer’s interpretation of Clause 7.5 was such that parking is not meant to be free, it should have been told to purchasers clearly and without ambiguity from the very beginning.

The purchasers’ understanding of the terms read together – “right of use” and “so long as the Purchaser remains the beneficial owner of the said Parcel” in the same clause – is that they would continue to enjoy free parking so long as their properties are not transferred to another party. If it was not meant to be free, then why is that clause included in the S&P? As such, there would not be any difference between purchasers of the properties and their visitors/customers, and absolutely no need to mention that clause in the S&P.

Based on the principle of equity, the developer of SDBH has forgone the right to impose any parking charges because it never explicitly mentioned parking was not free.

Furthermore, free parking has been allowed for a number of years. Also, according to the purchasers, representatives of SDBH at JMB meetings never challenged their protests againsts the decision on parking charge. Purchasers now accuse SDBH of misrepresentation prior to the signing of the S&P. Arguing from both points of written contract and the principle of equity, there are grounds for mala fide on the part of the developer.

Another contentious issue pertaining to purchasers of the two mixed-development projects is the “share unit” used to calculate maintenance charges as required by the Strata Management Act 2013. The developer, which later also became purchasers of en bloc and a large number of parcels, had used the selling price as the basis to calculate share unit instead of the area of the parcel as required by the Strata Title Act 1985. This is unfair due to different phases of development. Those who purchase earlier enjoy low weightage in the formula calculation.

The Commissioner of Buildings (COB) of each local government and the Housing Ministry have to seriously look into such matters to ensure that consumers are adequately protected against failed promises by developers and their unfair implementation of regulations set by local councils. – September 14, 2018.

* Wong Ang Peng is a researcher with an interest in economics, politics, and health issues.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.


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Comments


  • Every project comes with free parking lots. Consumers are not buying a shopping mall yeah?
    That is the industry norm. To read that clause any differently is an attempt to cheat home owners. Big businesse must be taught a lesson to respect ethics and decency

    Posted 5 years ago by Ju Laza · Reply