08/11/2020
(Covid-19) Act 2020, how does it affect the Purchaser and the Developer?
Coronavirus Disease 2019 (Covid-19) Act 2020 was passed in the Dewan Rakyat on the 25th August 2020 and in the Dewan Negara on the 22nd September 2020.
Whist the Act has impacted on several other Acts in Malaysia such as the Limitation Act, Industrial Relations Act, Insolvency Act, Distressed Act and etc., we highlight below the issues that concern the Housing Development (Control and Licensing Act) 1966, which bring impact on the Developer and the Purchaser particularly.
(1) Retrospective Effect
The modifications to the HDA 1966 will have retrospective effect as if it had come into operation from 18th March 2020.
(2) The Developer
The Developer shall not impose any late payment charges on the Purchaser who has failed to make payment towards any instalment for the period from 18th March 2020 to 31st August 2020, with the potential extension to 31st December 2020 if the Purchaser applies to the Minister. The extension, if granted by the Minister, the Developer shall not impose any late payment charge on the purchaser during the extended period.
(3) The Purchaser
The Purchaser is restricted from seeking any Liquidated and Ascertained Damages (LAD) against the Developer between 18th March 2020 and 31st August 2020. Similarly, the developer may apply to the Minister for an extension up to 31st December 2020. If the extension is granted, the Purchaser is not able to claim the LAD against the Developer up to 31st December 2020.
Nevertheless, it must be noted that any late payment charges paid by the Purchaser and LAD paid by the Developer before the publication of the new Act is not refundable and shall remain valid.
(4) Vacant Possession
If the Developer served a notice asking the Purchaser to take vacant possession of the said property between 18th March 2020 and 31st August 2020, or any extension period granted by the Minister, the Developer is not allowed to deem that the Purchaser has taken vacant possession of the said property.
(5) Defects Liability Period
The period from 18th March 2020 to 31st August 2020, or any extension granted by the Minister up to 31st December 2020, shall not be considered as part of the Defects Liability Period calculations for the Developer to make good defects.