Does the Covid-19 Act help contractors?

The government has announced the extension of the “effective period of inability to perform contractual obligations” under the Covid Act to March 31, 2021, which covers sale and purchase agreements, lease contracts and credit sales contracts for those affected by Covid-19.

While MBAM deputy president Oliver Wee Hiang Chyn welcomes the move as it benefits the industry as a whole, he pointed out contractors need more attention and help.

“Actually, the Covid Act has not helped the construction industry that much. In simple terms, it is just temporary suspension of obligations. Once the Act lapses on March 31, our obligation position will bring us back to before March 18 last year and we still need to apply for the EoT (Extension of Time).

“We (contractors) don’t even enjoy the 160 days EoT from KPKT (Ministry of Housing and Local Government) given to developers. We still need to argue for the right, he said in the Virtual Fireside Chat entitled “Impact of MCO 2.0 on the Malaysian Property Sector”, which was held on Jan 19, 2021.

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Wee urged the government to look into the issue and discuss with all the stakeholders, to ensure every stakeholder in the industry, especially contractors, is being taken care of, not to the maximum, but at least a fair extent.

Rehda Malaysia president Datuk Soam Heng Choon and Malaysian Institute of Architects (PAM) president Datuk Ezumi Harzani Ismail supported Wee’s statement, adding that the property industry stakeholders should share the burden and damage due to Covid-19 via a common-sense approach.

“No reasonable developer will let the contractor fall because it will bring more damage to the project and industry. Up to today, we don’t see any major issue as developers are holding the hand of contractors and offering as much help as they can to complete a project,” Soam noted.

At the same time, Ezumi added it would be helpful if Singapore’s property industry Covid-19 regulations could be imposed in Malaysia, such as implementing a four-month time freeze and a clearer indication of pandemic additional costs incurred to make sure no parties take advantage of the situation and share the losses.

“Nonetheless, I am optimistic we would be in a better position in the second half of this year as the vaccine would be here,” Ezumi concluded.

This story first appeared in the e-weekly on Jan 22, 2021. You can access back issues here.

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