KUCHING: The recent ruling of Kuching High Court that Liquidated Ascertained Damages (LAD) for late delivery of properties in Sarawak only starts from the signing of Sales And Purchase Agreement (SPA), and not from the date of booking – will ensure house prices remain stable.
Datuk Sim Kiang Chiok, a real estate developer in Kuching, said the decision was fair because a booking form can be signed with or without a fee, thus, there was not any further obligation or significant consequences.
“So, some potential buyers would easily cancel their booking,” he said told New Sarawak Tribune.
He said, meanwhile, the signing of SPA – is a legally binding contract which outlines the details of a sale between a buyer and a seller (or developer). Thus, it was reasonable that the LAD should start from the signing of SPA.
Sim said if the LAD for late delivery of properties start from that date of booking like in Peninsular Malaysia – it has no doubt that it gives better protection to the buyers but definitely unfair to the developer.
Besides, he said, the cost of building residential houses in Sarawak is expected to increase (if LAD starts from the date of booking) as developer will have to provide a higher contingency for LAD due to longer period of delay, which will push up the price of houses in the state.
Sim, who is also the Sarawak Housing and Real Estate Developers’ Association (Sheda) Kuching chairman said lawmakers could review and push for new housing rules or laws from time to time.
“But, it was also necessary to ensure that it would not cause the compliance cost to hike, which will be reflected in dearer selling price of properties in Sarawak,” he said.
“The current Housing Developer Ordinance (HDO) is sufficient to protect the purchasers or buyers while any amendment to the ordinance for LAD for late delivery of properties in Sarawak to start from the date of booking will definitely add cost to new residential houses,” he added.
Sim welcomed all developers, consultants, contractors and lawyers to continue to contribute to the various functions of housing development in the best interest all Sarawakians, especially to assist them to own a house at an affordable price.
A property website, PropertyGuru explained that LAD was a clause in the SPA, which allows buyer to claim for compensation if their new home is not handed over to them within a stipulated time frame as buyers will most definitely suffer from some form of financial loss.
It was actually a clause that protects property buyers, in case a developer is not able to deliver their new homes on time.
Meanwhile, Sarawak Public Health, Housing and Local Government II Deputy Minister Michael Tiang said that the High Court’s decision clarified that the booking is not a commitment or a contract.
He said the court’s decision protected the rights of both developers and buyers.
“If the buyer has paid the deposit to the developer and in any event, the loan application was not approved by the bank, the buyers could ask for a refund of the deposit for this reason. Otherwise, the developer would proceed to ask the buyers to sign the SPA,” he explained.
However, Sarawak DAP Chairman Chong Chieng Jen argued that the law regulating the SPA for housing projects in Sarawak, was ‘less favourable’ to ordinary house purchasers, compared to such law in Peninsular Malaysia.
He said the Federal Court ruled that in Peninsular Malaysia, the time for a developer to deliver the houses to the purchasers shall be calculated from the date the booking fee was collected, not the date of the SPA.
“At times, the payment of booking fees and the date of the SPA can be months apart; the provisions in the Sarawak law would give developers a loophole to circumvent the 24-month period to complete and deliver the houses, thus compromising the protection given to house purchasers,” Chong said.
But, Tiang has refuted the claim that it would not take months for a buyer to proceed from booking a unit to signing the SPA.
He advised house buyers who have issues pertaining to any breach of their SPA to lodge complaints with the Tribunal for Homebuyer Claims without any delay to safeguard their rights as purchasers.
He said a claim filed with the tribunal should not be made later than 18 months from the date of issuance of the Occupation Permit (OP) or before the defect liability period ends as specified in the sale and purchase agreement.
