theSun Property November 2014

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DID YOU KNOW?
HBA offers free consultation and service to the public in dealing with errant developers at
its house buyers’ advice centre on designated Saturdays.
[Source: ]
QUICK FACT
The Homebuyer’s Claim Tribunal does not make any award for any non-monetary loss or
damage.
[Source: ]
AWARDS THAT CAN BE ISSUED BY THE HOMEBUYER’S CLAIM
TRIBUNAL
[Source:
ON FRIDAY NOVEMBER 7, 2014
LAST week, this column
discussed the formation,
objectives and jurisdiction
of the Homebuyer’s Claim
Tribunal. Today, we analyse the
most frustrating problem
encountered by homebuyers who
have received awards in their
favour from the tribunal. How to
pursue developers who refuse to
complywith the tribunal’s award.
A HOMEBUYER’S
DILEMMA…SOLVED?
When the tribunal ordered Annette
Thesan’s developer to pay her
RM34,000 in late delivery charges,
she was surprised, yet relieved and
elated. “The entire process took
less than threemonths. Apart from
transportation costs, the only other
expense I had incurredwas the
RM10 filing fee,” Thesan shares.
However, what unfolded next
caught her by surprise. “The
developer refused to pay! How
could he do this? Isn’t an award by
the tribunal considered binding
and deemed an order of the court?”
GIVINGDUE CREDIT
“The tribunal must be given credit
for the straightforward,
inexpensive (rather cheap) and
speedy resolution of disputes,” says
National House Buyers Association
(HBA) honorary secretary-general
Chang KimLoong.
As indicated by official statistics
from the tribunal, up until
September 2014, 37,635 cases have
been filed, out of which, 37,388 have
been resolved. These figures reveal
an impressive 99% resolution.
“The HBA has also been told of
many cases where homebuyers
were given awards at the very first
hearing. However, unless errant
developers aremade to be award-
compliant, homebuyers will
continue to have doubts on the
efficacy of the tribunal,”
Chang gathers.
WHERE THE ISSUE LIES
As mentioned in last week’s article,
there are serious consequences in
failing to complywith an award
specified by the tribunal. On
conviction the incompliant party
can be liable to a fine of not less
than RM5,000 but not exceeding
RM10,000 or imprisonment for a
termnot exceeding two years, or
both. An additional finemay be
imposed on the offender after the
conviction – of up to RM1,000 for
each day or part of a day.
However, Chang explains that
the prosecution depends on the
public prosecutor (of the National
Housing Unit) and not the Housing
Tribunal. “Once the tribunal grants
an award, it is registered at the
relevant civil court where it is
equivalent to a judgment. The work
of the tribunal is then considered
done,” he says. If the developer
refuses tomake the
payment awarded by
the tribunal, the
homebuyer will have to
go to the civil court for
enforcement of the
award.
According to the
tribunal, if a developer
fails to complywith an
award, the homebuyer
can take either civil or
criminal action.
“Enforcement
proceedings can range
from judgment debtor
summons to
prohibitory orders or
attachment and seizure.
They can evenwind up the
developer’s company. Whatever
the enforcement proceeding
chosen to gowith, the lawyers treat
it independently, separate from the
work done in obtaining the
judgment therefore charge a
separate fee for enforcement
proceedings,” informs Chang.
GETTING ERRANT
DEVELOPERS TO COMPLY
Chang says that cases of developers
being prosecuted remains sporadic
because they tend to have access to
some of the best lawyers. “It is
common for them towalk away
with trivial fines,” he says.
A check with several lawyers
and developers dealing with these
cases reveal that the prevailing
reason for developers’ non-
compliance is due to financial
risks. Even if the developer is at
fault, they feel that by paying one
home owner, others will follow,
resulting in the developers having
to compensate some hundreds of
affected buyers. Financially,
developers think it too risky.
Hence, they hire lawyers and put
forth delaying tactics to frustrate
the buyer.
Going to court is expensive and
time consuming. These are the
main reasons homebuyers avoid
(or leave for last) using this means
to resolve their housing issues.
Developers on the other hand,
hope that the homebuyer will be
put-off by the process and not take
matters up to court. Some hope the
home owner will agree to a much
lower settlement. “I have also
received reports of cases where
the developer retracts and makes
an 11th hour settlement at the date
of the case hearing (of the
prosecution cases) thus,
resulting in the case being
classified as ‘discharge
not amounting
to acquittal’,”
says Chang.
“This makes a mockery of the
law. If an offence has been
committed under Section 16AD
(the section states that non-
compliance of the tribunal’s award
is a criminal offence), then the
prosecutors must press for
deterrent punishment even though
they (the developer) had made
restitution. It is like stealing a
product from a supermarket and
after having been caught, the
thief returns back the product,”
he explains.
Chang believes that the best
way to get errant developers to
comply with an award from the
tribunal is through effective
prosecution. “In fact, I say that
severe sentences, such as
imprisonment, in a few or even
just a couple of prosecution cases,
would serve as an effective
deterrence for incompliant
developers. You have to send
shivers down the spines of those
defiant developers.”
>Pursuingnon-complianceof awards
PART2 Trust in the tribunal
Awards by the tribunal can include one or
more of the following:
That one party pays money to the other
party.
That the price or other consideration paid
by the aggrieved party be refunded.
That the party complies with the SPA.
X
X
X
That money be awarded to compensate
for any loss or damage suffered by the
claimant.
That the contract be varied or set aside,
wholly or in part.
The costs to or against any party be paid.
That interest be paid on any sum or mon-
etary award at a rate not exceeding 8%per
annum.
X
X
X
X