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Federal Court: Late delivery payment begins from booking fee collection

January 19th, 2021 No comments

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The calculation for late delivery payment to house buyers begins from the date the booking fee is paid, and not when the sale and purchase agreement (SPA) is signed, the Federal Court ruled today.

Chief Justice Tengku Maimun Tuan Mat said the Housing Development (Control & Licensing) 1966 and its subsidiary laws were social legislation and that was a settled law.

In a dispute brought before the court, the developers contended that the scheduled contracts must be read literally and in accordance with the intention of parties.

“It is our view that the submission is untenable. When it comes to interpreting social legislation, the courts must give effect to the intention of Parliament and not the intention of parties,” Tengku Maimun said.

“Otherwise, the attempt by the legislature to level the playing field by mitigating the inequality of bargaining power would be rendered nugatory and illusory,” she said in the judgment to allow seven appeals by purchasers.

The purchasers, from Melaka and Kuala Lumpur, had hauled the developers – PJD Regency Sdn Bhd, GJH Avenue Sdn Bhd and Sri Damansara Sdn Bhd – before the housing tribunal over the payment of the liquidated ascertained damages.

Tengku Maimun said the courts would not countenance the bypassing of statutory safeguards meant to protect the purchasers.

“While the developers might think that it is a standard commercial practice to accept booking fees, the development of the law clearly suggests to the contrary,” she said adding that the courts would not condone such a practice until the law said otherwise.

The court said the LAD payable by housing developers to purchasers for late delivery of vacant possession in a housing project begins when the booking fee is collected and not when the SPA is signed between the developer and purchaser.

Other judges in the five-member bench were Nallini Pathmanathan, Abdul Rahman Sebli, Zabariah Yusof and Mary Lim Thiam Suan. The unanimous verdict was delivered through a virtual proceeding following the enforcement of the movement control order since last week.

In one of the cases, purchaser Wong Kien Choon bought a property from PJD Regency in Kuala Lumpur at RM501,800 and paid RM10,000 as commitment fee (booking fee) on Jan 16, 2013.

The SPA was signed on March 21, 2013 and the contract stated that vacant possession must be delivered within 42 months or by September 2016. However, the developer only informed Wong to collect keys to his house on Jan 23, 2017.

Wong asked the developer to pay him RM33,000 in LAD but the developer disputed the amount.

The matter was referred to the housing tribunal which ruled in favour of Wong. PJD’s appeal to the High Court and Court of Appeal were also dismissed.

Lawyers Kok Kean Kang, Viola D Cruz, Andy KL Wong and Rex RS Wong through the National House Buyers Association (HBA) appeared for Wong and another buyer, Ng Chee Kuan.

HBA secretary-general Chang Kim Loong said it was a landmark ruling and another victory for house buyers.

He urged the housing and local government ministry to put to rest the issue and to enforce laws and regulations that prohibited developers, estate agents, lawyers or any third party purportedly acting for developers to collect booking fees.

“There has not been any reports of prosecution for this blatant defiance of the law,” he said.

Real Estate Lawyers Association president Pritam Singh said today’s ruling had brought some clarity to the law.

Source: FreeMalaysiaToday.com

 

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Worsening Covid-19 situation will derail property market recovery

January 19th, 2021 No comments

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Last year had been extremely challenging for the overall market, including real estate, due to the prolonged Covid-19 pandemic and it continues to disrupt lives, economies, and societies globally.

Homebuyers and investors held on to their money due to the certainty in the market and because of that many developers registered a higher number of unsold properties.

Knight Frank Malaysia managing director, Sarkunan Subramaniam said the current worsening of the Covid-19 situation in the country is expected to derail the recovery in the property market as more developers push back their launches.

Sarkunan expects potential buyers and investors to likely postpone property purchases in the short-term as they adopt a wait-and-see approach.

He said the anticipated rollout of the Covid-19 vaccine is expected to boost hopes for a return to normalcy and will set the path for recovery of the global economy.

“The performance of the residential market is very much dependent on how the economy moves forward. The anticipated commercial rollout of the Covid-19 vaccine by 1H2021 will certainly boost the hopes for the country’s economic recovery and lift overall consumer sentiment. However, the current ongoing political uncertainties amid the worsening Covid-19 crisis has led property buyers as well as developers to rethink their future plans and strategies,” he said.

Sarkunan said these are reasons to believe that the residential market is expected to remain challenging in the first half of 2021.

Malaysia’s economy is expected to rebound in 2021 given the expected commercial rollout of the Covid-19 vaccine by the first half of this year (1H2021).

The government predicts that the economy will expand between 6.5 per cent and 7.5 per cent in 2021 driven by the anticipated improvement in global growth and international trade.

Sarkunan said post-Movement Control Order (MCO), selected developers have reportedly recorded improved bookings supported by the low-interest-rate environment and pent-up demand.

“The conversion of bookings into sales, however, has been more challenging due to stringent bank requirements,” he said in a statement that was issued following the launch of the firm’s latest research report, Real Estate Highlights 2nd Half of 2020, here, today.

Incentives to boost the market this year

Sarkunan said the re-introduction of the Home Ownership Campaign (HOC) in June 2020, coupled with several initiatives under the recently tabled Budget 2021 are expected to boost market activity – include a full stamp duty exemption on both instruments of transfer and loan agreement for the first home purchase worth up to RM500,000. The exemption is applicable for the sale and purchase agreement on purchases that are completed from January 1, 2021, until December 31, 2025.

Stamp duty exemptions on loan agreements and the transfer instrument for abandoned housing projects will be extended for another five years, also till December 31, 2025. The waiver of stamp duty will lower upfront cash payments and encourage home-ownership among the first-timers.

The proposed full stamp duty waiver complements the real property gains tax (RPGT) exemption as unveiled under the country’s Short-Term Economic Recovery Plan (PENJANA) in June 2020, whereby gains arising from disposing of residential property by Malaysians (limited to three units per individual), between June 1, 2020, and December 31, 2021, are exempted from RPGT. Sarkunan believes that collectively, these incentives are expected to spur more activities in the primary and secondary residential markets, further supported by the current low interest rate environment.

In addition to that, he expects the reduction in employee’s statutory contribution rate from 11 per cent to nine per cent effective 2021, will boost disposable income and ramp up domestic spending.

Moving forward, with lower-interest rates and higher disposable income, more potential purchasers who qualify for loans may be encouraged to start buying properties and this may provide some traction to the sluggish housing market, he said.

Source: NST Online

 

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UPCOMING: Butterworth / Woolley Development Sdn Bhd

January 18th, 2021 No comments

proposed-development-woolley-develpoment-butterworth

This is a residential development by Woolley Development Sdn. Bhd. at Butterworth. Strategically located near Jalan Dahlia, easily accessible via the ever bustling Jalan Raja Uda. It is adjacent to Bola-Bola Sports Centre and the proposed Garden City mixed development by Flexizone Venture Sdn. Bhd.

The proposed development comprises a 12-storey medium cost apartment, offering 198 residential units.

Property Project : (to be confirmed)
Location : Raja Uda, Butterworth
Property Type : Apartment
Total Units: 198
Built-up Area: (to be confirmed)
Indicative Price:(to be confirmed)
Developer :Woolley Development Sdn. Bhd.

Register your interest here

(This information will be used to keep you updated on the project and future development.)
*By submitting this Form, you hereby agree to our PDPA Consent Clause.

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DISCLAIMER: This article is solely based on research done using publicly available data. This is not an advertisement. Any claim, statistic, quote or other representation about a project or service should be verified with the developer, provider or party in question.

BNM expected to cut OPR to new low of 1.5%

January 16th, 2021 4 comments

bnm

DBS Group Research is predicting Bank Negara Malaysia (BNM) to cut the overnight policy rate (OPR) by another 25 basis points (bps), which would bring the interest rate to a new low of 1.5%, in the forthcoming monetary policy meeting scheduled for Jan 20 next week.

The move is expected to be taken in response to the potential impact on the economy of the recent announcement of the state of emergency and the reimplementation of the movement control order (MCO), according to DBS economist Irvin Seah in a note today.

“We reckon that the latest set of measures will likely trim overall GDP (gross domestic product) growth in 2021 by about 0.8 percentage point to 5.2%, down from our current forecast of 6%. Domestic consumption will be most affected and remain a key drag on growth,” said Seah.

Last year, the local central bank made four OPR cuts and slashed a total of 125bps to its lowest-ever level of 1.75%.

The government recently announced the national state of emergency until Aug 1 and reinstated the MCO for two weeks in a bid to contain the worsening Covid-19 situation, of which the total number of infections exceeded 145,000, from about 11,000 in early October, while daily new cases surpassed the 3,000 mark over the past few days.

The MCO entails tighter restrictions on social and work mobility across Penang, Selangor, Melaka, Johor and Sabah, as well as the federal territories of Kuala Lumpur, Putrajaya and Labuan, which account for about two-thirds of the country’s GDP, and chances are high that it will be extended, judging from the rapid spread of the Covid-19 pandemic, said Seah.

“Though Bank Negara would be easing against a backdrop of US curve steepening, strong global reflation optimism and Asian central banks generally on hold, we do not expect an adverse reaction from financial markets, especially as real rates remain relatively high,” said Seah.

He added that foreign inflows into Malaysian Government Securities (MGS) and Malaysian Government Investment Issues (MGII) also stayed robust in recent months, and should continue to be supported by buoyant global risk sentiments and higher energy prices.

Source: EdgeProp.my

 

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Penang to extend House Ownership Campaign to end of 2021

January 15th, 2021 2 comments

penang-condo-jagdeep

The Penang government plans to extend the House Ownership Campaign (HOC) to the year-end following implementation of the movement control order (MCO) and imposition of Emergency which is expected to continue until August.

State Housing, Local Government and Town and Country Planning Committee chairman, Jagdeep Singh Deo said this measure was aimed at reducing the burden of new house buyers during this difficult time and for economic generation in the real estate sector.

“In Penang, we have almost 3,000 unsold houses worth RM 2.9 billion but out of this number, only 0.8 per cent of affordable homes priced under RM300,000 are still unsold. We will try to assist this sector as it is important in ensuring cash flow in the market,” he said at a news conference, here, today.

The HOC was introduced as an incentive to new house buyers, namely, stamp duty exemption and a discount of at least 10 per cent of the sales price from housing developers in encouraging house ownership among the locals.

Jagdeep said the state government had approved almost 4,000 applications for low-cost, low medium-cost and affordable homes.

He said it was committed to having a supply of affordable homes with prices ranging from RM42,000 for low-cost units, RM72,500 for low medium and up to RM300,000 for various affordable units.

Source: Bernama

 

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