Purchaser grievances (Part 2)

LAST week, our column highlighted the fact that we have an adequate, in fact, a most benevolent social legislation in place – the Housing Development (Control and Licensing) Act 1966, along with its various regulations made thereunder. Having briefly run through how the Build-Then-Sell (BTS) system will deprive house purchasers of complete legal housing protection, and the fact that there is sufficient legislative control, plus the Housing Tribunal for Homebuyers Claims where purchasers can put forward their grievances and claims, this week, we analyse the housing developers' duties.
Duties of a licensed housing developer includes the following:
(a) within four weeks of the making of any alterations in or to any of the documents submitted to the Controller under subsection 5 (3), furnish to the Controller written particulars of the alterations;
(b) exhibit at all times in a conspicuous position in any office and branch office of the licensed housing developer and at any other place where a sale of housing accommodation is conducted, a copy of his licence, advertisement and sale permit and a copy of his last audited balance-sheet as soon as the same is available and such information as the present or former full name, usual residential address, nationality, nationality of origin (where the present nationality is not that of origin), business or occupation (if any) of each person who has the control and management of the business of the licensed housing developer and particulars of any other directorship held by that person;
(c) keep or cause to be kept in his office in West Malaysia such accounting and other records as will sufficiently explain the transactions and the financial position of the licensed housing developer and enable true and fair profit and loss accounts and balance-sheets and any documents required to be attached thereto to be prepared from time to time, and shall cause these records to be kept in such manner as to enable them to be conveniently and properly audited;
(d) annually appoint an auditor or auditors in the manner required under section 9;
(e) within six months after the close of the financial year of the licensed housing developer in question, send to the Controller and also publish in the Gazette, a copy of the report of the auditor prepared under section 9 together with a copy of his balance-sheet and profit and loss account;
(f) not later than the 21st day of January and the 21st day of July of each year or at such frequency as may be determined by the Controller from time to time or upon the request of the Controller, send to the Controller a correct and complete statement in writing made on oath or affirmation, in such form and containing such information as the Controller may from time to time determine, on the progress of the housing development which the housing developer is engaged in, carries on or undertakes or causes to be undertaken until the certificate of completion and compliance have been issued for all the housing accommodation in that housing development;
(g) where he considers that he is likely to become unable to meet his obligations to the purchasers at any stage of the housing development, before the issuance of the certificate of fitness of completion and compliance, forthwith inform the Controller of such fact;
(h) undertake the following:
(i) within twenty-one days from the date of receipt by the housing developer of the certificate of completion and compliance, submit such certificate to the Controller; and
(ii) within twenty-one days after the date of handing over of vacant possession to the first purchaser of the housing accommodation in the housing development, inform the Controller in writing of the handing over;
(i) inform the Controller of any refusal in the issuance of the certificate of completion and compliance;
(j) ensure that the development of the housing accommodation has been carried out in accordance with any requirements prescribed under any law regulating buildings and has exercised all such diligence as may be required for the issuance of the certificate of completion and compliance and for the issuance and transfer of the titles to the housing accommodation to the purchasers; and
(k) inform the Controller of the progress in the issuance of separate or strata titles for the housing accommodation and the transfer of such titles to the purchasers at such frequency as may be determined by the Controller beginning from the date of the handing over of vacant possession to the first purchaser of the housing accommodation in the housing development until the separate or strata titles for all the housing accommodation have been issued.
DUTY IN RELATION TO ADVERTISEMENTS
No advertisement or sale shall be made by any licensed housing developer without an advertisement and sale permit having first been obtained from the Controller.
Any advertisement and sale shall be in accordance with the advertisement and sale permit as approved by the Controller. (Reg 5).This means that no advertisement can be carried out, including registration exercises, unless that advertisement is first submitted to the Controller of Housing for approval.
The following mandatory information have to be provided in all advertisements, namely:
(1) any advertisement (other than those conveyed by means of broadcast sound receivers or through television receivers) made by any licensed housing developer shall include the following particulars:
(a) the housing developer's licence number and validity date;
(b) the advertisement and sale permit number and validity date;
(c) the name and address of the licensed housing developer and his authorised agent, power of attorney holder or project management company, if any, as approved by the Controller;
(d) the tenure of the land if the land is leasehold, its expiry date, restriction in interest and encumbrances, if any, to which the land is subject;
(e) the description of the proposed housing accommodation;
(ea) any parking lot which is an accessory parcel to the housing accommodation in a parcel and which does not form part of the common property of the accommodation;
(f) the name of the housing development, if any;
(g) the expected date of completion of the proposed housing development;
(h) the selling price of each type of housing accommodation;
(ha) where applicable, the minimum and maximum selling price of each type of housing accommodation;
(i) the number of units of each type available; and
(j) the name of the appropriate authority approving the building plans and the reference number.
(Reg 6)
DID YOU KNOW?
Duty to open and operate a housing development account
Section 7A of the Act requires all developers to open and maintain a Housing Development Account, unless the developer is implementing a "Build & Sell" system, with a bank or a financing company for each housing development undertaken by him. There is also a strict regime on what ought to be deposited and withdrawn.

THE STANDARD SALE AND PURCHASE AGREEMENT (SPA)
Every contract of sale and purchase (SPA) of a housing accommodation, together with the subdivided portion of land appurtenant thereto shall be in the form prescribed in Schedule G and where the contract of sale is for the sale and purchase of a housing accommodation in a subdivided building, it shall be in the form prescribed in Schedule H.

No housing developer shall collect any payment by whatever name called except as prescribed by the contract of sale.
"If you have required your homebuyer to sign a contract that supplements the Sales and Purchase Agreement, it be may be an offence as there can only be one agreement between homebuyer and Developer."
"... the parties may not contract out of the contract and to do so is an open defiance of the Housing Developers legislation".
This standardisation of SPA is the most effective way to ensure that purchaser's rights are protected. In a BTS system, there will be no standard SPA to accord protection. Hence, there will be calls for a Fair Housing Act.
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