Report: Federal Court ruling on housing tribunal’s scope ‘raises more questions’

KUALA LUMPUR (Feb 20): A Federal Court “landmark ruling” of Feb 10 on “the scope of and powers” of the Tribunal for Homebuyer Claims seems to have provoked a lot of questions, according to a report by The Edge Malaysia.

The ruling stated that the tribunal “can only decide on claims against what was expressly stipulated in the SPA, and not based on the purchaser’s expectations or what was displayed in the developer’s showroom”.

According to the Federal Court, if anyone has “taken possession of the property, inspected it and went on to renovate the unit, he is estopped in law to maintain a claim that he had been handed the wrong unit by the developer (in that it was not the specific unit he had paid for),” wrote The Edge.

The weekly asked: “What are the alternative avenues for recourse? Can these avenues be as easy, quick and cheap as the tribunal? Should the purchaser reject the property, hold on to the unit and live in it, or rent it out even as he continues to service his loan?”

Some lawyers who spoke to the publication also asked questions such as – “Must the buyer make these claims before he takes VP of the property? What is the buyer’s remedy if he has already taken VP and then realises the wrong specifications? Can the tribunal only consider issues arising from the SPA and not an essential element of contract such as the invitation to treat (like a brochure or showroom unit) that leads to an offer to purchase being made?”

Commercial and construction partner at Hakem Arabi & Associates, Ranjan N Chandran, said that “While appreciating that the grounds of judgment of the Federal Court is not out as yet, it can be assumed that the clear message of the court is that the housing tribunal cannot willy-nilly award compensation/damages to purchasers outside its scope and jurisdiction, which will be limited to what the developer and purchaser have agreed to in the SPA and no other supplementary documents as proof. To sum up, the claim in the tribunal will be confined to a contractual claim.”  

“The tribunal may now be rendered as constrained in its scope and jurisdiction and encourages more aggrieved purchasers to head directly to commence action in court,” Ranjan added.

The Tribunal for Homebuyer Claims was established under the Housing Development (Control & Licensing) Act 1996 (HDA) in December 2002.

Read the full report in this week’s The Edge Malaysia

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