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MALAYSIA’S COVID-19 BILL 2020 IN THE ASPECT OF HOUSING DEVELOPMENT (CONTROL AND LICENSING) ACT 1966

This bill serves as a temporary measure to reduce the impact of the Coronavirus Disease 2019 (Covid-19) Bill 2020 (“the Covid-19 Bill”) and was tabled for first reading on 12 August 2020 in the Dewan Rakyat. The Bill has passed a third reading at the Dewan Rakyat and is expected to be gazetted in the near future to be an Act of Parliament. This Covid-19 Bill, if gazetted, will have retrospective effect and will be deemed to have come into operation on 18 March 2020 as per the Covid-19 Bill.

The Covid-19 Bill provides temporary relief to reduce the impact of the COVID-19 pandemic and the effects of the Movement Control Order (“MCO”) by modifying the statutory provisions and one of the key measures taken was to address the issues under Housing Development (Control and Licensing) Act 1966 (“HDA 1966”).

MODIFICATIONS UNDER PART XI OF THE COVID-19 BILL

The agreement referred in Section 33 of the Covid-19 Bill covers all the contract of sale for the sale and purchase of housing accommodation prescribed in Schedule G, H, I & J of the Housing Development (Control and Licensing) Regulations 1989 (“HDR 1989”) entered into before 18 March 2020.

Section 34 of the Covid-19 Bill provides that notwithstanding any agreement entered between the purchaser and the developer, the developer shall not impose any late payment charges in respect of such unpaid instalment for the period from 18 March 2020 to 31 August 2020 (“the Period”) on the purchaser due to MCO. The Covid-19 Bill allows purchaser to apply to the Minister for an extension of the Period and subject to the Minister’s satisfaction that additional time is required by the Purchaser, by a written direction to the Developer, extend the period of which Developer shall not impose any late payment charges on the purchaser in respect of such unpaid instalment during the extended period up to 31 December 2020.

Section 35 of the Covid-19 Bill is addressing the issues of late delivery of vacant possession and determination of liquidated damages. Notwithstanding any agreement entered between the purchaser and the developer, the period from 18 March 2020 to 31 August 2020 shall be excluded from the calculation of the time for delivery of vacant possession of a housing accommodation and the liquidated damages for the failure of the developer to deliver vacant possession. The Covid-19 Bill allows Developer to apply to the Minister for an extension of the Period and subject to the Minister’s satisfaction that additional time is required by the developer to deliver vacant possession, by a written direction to the developer, to extend the period up to 31 December 2020 and the Purchaser is restricted from seeking any liquidated damages against the developer for the extended period. Aside to the above, Section 35(4) also provides protection to Purchaser in respect of entering into possession of occupation of the housing accommodation from the date of service of a notice of vacant possession by the developer during the Period or any extension period granted under this Section, the purchaser shall not be deemed to have taken such vacant possession.

Section 36 of the Covid-19 Bill provides that notwithstanding any agreement entered between the purchaser and the developer, the period from 18 March 2020 to 31 August 2020 (“the Period”) shall be excluded from the determination of commencement of the defect liability period after the date the purchaser takes vacant possession of a housing accommodation and the calculation of time for the developer to carry out works to repair and make good the defect, shrinkages and other faults in a housing accommodation. Likewise the provisions above, the purchaser is allowed to apply to the Minister for an extension of the Period and subject to the Minister’s satisfaction that additional time is required by the purchaser, by a written direction to the developer, exclude the period up to 31 December 2020 in deriving the commencement of defect liability period and the time for the developer to carry out works to repair and make good the defect, shrinkages, and other faults in a housing development.

The Covid-19 Bill however states that the modifications in sections 34, 35 and 36 shall not affect any legal proceedings commenced, or any judgment or award obtained, to recover late payment charges payable by the purchaser or liquidated damages payable by the developer or any other sum during the period from 18 March 2020 until the date of publication of this Act. Any late payment charges that has been paid by the Purchaser or liquidated damages that has been paid by the developer before the date of publication of this Act shall be deemed to have been validly paid under HDA and its regulation and is not refundable.

In addition to the above, the Covid-19 Bill also extended the limitation period for homebuyer to file a claim under section 16N of the HDA 1966 if the limitation period has expired during the period from 18 March 2020 to 9 June 2020, the homebuyer is entitled to file the claim from 4 May 2020 to 31 December 2020.

In the event of any inconsistency or conflict between the modifications made by this Covid-19 Bill and any other written prevailing law, the provisions of this Covid-19 Bill, if enacted, shall prevail and such conflicting provisions in such prevailing law shall be deemed to be superseded to the extent of the conflict or inconsistency.

The Covid -19 Bill, if passed into law, shall come into operation on the date of publication of the law and shall continue to remain in operation for a period of two years from such date of publication. Notwithstanding the above, the government may by order published in Gazette, extend the operation of the law.

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