Unit owners at Cyberjaya property to sue developer over alleged payment defaults

PETALING JAYA (Jan 18): Almost 60 owners of units in The Arc @ Cyberjaya condominium have launched a class action suit against its developer Maju Puncakbumi Sdn Bhd for allegedly defaulting on a guaranteed rental return (GRR) scheme payment.

The lawsuit was prompted by the purported sudden termination of the Option Agreement for the GRR — which the unit owners signed in tandem with the sale and purchase agreement when purchasing the units — ahead of its original ending date in August.

The owners are seeking RM1.8 million in outstanding rentals, said lawyer Vincent Lim Chang who is representing the residents in a statement today.

According to him, the property developer had marketed the GRR in its promotional materials for The Arc in 2011, drawing many people from the Klang Valley and East Malaysia to invest in units there.

“At the time when they purchased the property, they signed as one package, two agreements; one the sale and purchase agreement to purchase the serviced apartment from the developer. At the same time, they also signed another tenancy agreement: Option Agreement.

“The payment commenced in the year 2014, maybe middle of 2014. But since 2016, sometime in the middle of 2016, the developer defaulted on the payments of the rental to the owners,” he said.

Under the GRR, the developer rents the units from the owners and pays them rent according to the stipulated rate and tenure.

The GRR, according to the website of Andaman Group — the developer’s management company — comes in two periods, namely up to six years or up to 25 years with a gross rental income of 8% per year for the first term in 2011.

Lim Chang said despite unit owners calling Maju Puncakbumi and sending notice of demands, they were ignored.

He said while the developer has terminated the Option Agreement, it still is liable to pay the owners the promised rental.

“It’s a very straightforward case. The owners only want to claim something reasonable for them. They want the rental and the interest. They are demanding something reasonable, lawful and valid,” he said.

According to him, the developer has not replied to the notice of demand sent on behalf of his clients.

A number of buyers claim they were left in the lurch after the rental payments were allegedly stopped, as they were unable to service their mortages.

Patricia Lim, who is one of the owners pursuing the class action suit, had resorted to borrowing from family members to pay off her mortgage when the GRR payments allegedly ceased. “The reason that I bought this unit and also introduced my brother and my friend to buy is because of the 25 years’ GRR. We are expecting hassle-free rental for 25 years, with the option to renew it every four years,” she said.

Meanwhile, her brother Lim Ta Wen said: “There are a lot of serviced apartments and condominiums in Cyberjaya. The reason we bought units here is because of the GRR. The GRR interested us because we don’t need to have any headache servicing our loans.” 

This follows the first second-class action suit filed against the developer, where a group of 137 unit owners of the same development sought the rental returns guaranteed to them.

In November 2017, the Shah Alam High Court awarded the owners RM3.97 million — comprising the outstanding rentals until May 2017, 8% interest on the outstanding rentals, agreed liquidated damages, general damages, aggravated damages of RM10, exemplary damages, 5% interest on the overall damages and costs of RM15,000. It allowed an interim stay for vacant possession of the units.

According to Andaman Group’s website, The Arc @ Cyberjaya is a freehold mixed-use development comprising four blocks of serviced apartments with 2- and 3-bedroom fully-furnished serviced apartments, four institutional towers, and a sports academy.

The units range from 913 sq ft to 1,915 sq ft and are priced from RM350,000.