Better Protection for House Buyers
By: Yeoh su Hui
Prior to Dec 1, 2002, the definition of “housing developer” under the Housing Development (Control and Licensing) Act, 1966 (Act 118) did not include the words “firm or society (by whatever name described)”.
Further Section 2(1) provided that the Act did not apply to any society registered or incorporated under any written law relating to cooperative societies and any body or agency established and incorporated by statute and under the control of the Federal Government or the Government of any State.
As a result, housing developers who are societies, cooperatives and state and statutory corporations, such as Perbadanan Kemajuan Negeri Selangor (“PKNS”), Perbadanan Kemajuan Negeri Melaka (“PKNM”), Penang Development Corporation (“PDC”), Koperasi Tunas Muda (“KTM”)(collectively called “the exempted developers”) did not have to comply with the provisions of Act 118, notwithstanding that these non-licensed developers were undertaking huge housing projects.
These exempted developers were not required to apply for a housing developer’s license or an advertisement and sales permit when undertaking a housing development project. The contract of sale for the sale and purchase of the housing accommodation entered into between the purchasers and these exempted developers did not have to comply with the form prescribed in Schedule G or Schedule H of the Housing Development (Control and Licensing) Regulations 1989 (“the Regulations”).
Housing developers who required to be licensed under Act 118 will have to complete a particular stage of construction of the housing accommodation before they can claim any monies or progress payments. Further, the defect liability period prescribed under the Regulations is 18 months after date the purchaser takes vacant possession of the housing accommodation. A licensed housing developer is required to complete and deliver vacant possession of the housing accommodation within 24 months (landed properties), or 36 months (apartments or condominiums), as the case may be.
These exempted developers need not follow the schedule of payments prescribed under the Regulations. Some of them were collecting progress payments upon commencement of construction of a particular stage of work of the property instead of upon completion of the same. Instead of the 18 months’ defect liability period, some of these exempted developers gave their purchasers only a 12 months’ defect liability period.
Further, when these exempted developers do not complete the housing accommodation within the 24 months or 36 months prescribed by the Regulation, they do not contravene any statutory provisions as they are not governed by Act 118. Purchasers who bought housing accommodation form these exempted developers did not have benefit of the statutory protection granted under Act 118 and the Regulations. Any relief or remedy sought by the purchasers against these exempted developers will have to be based on the terms and conditions of the actual contract sale.
Many purchasers felt short-changed as the law did not provide any protection for them in the event they were to purchase housing accommodation which are developed by these exempted developers.
Situation After Dec 1, 2002
The Housing and Local Government Ministry and various non-governmental organizations, such as the Consumer Association of Penang (“CAP”) were very concerned that exempted developers were not governed by Act 118.
On Dec 1, 2002, Act 118 was amended by deleting Section 2. The definition of “housing developer” was also amended to read as “any person, body of persons, company, firm or society (by whatever name described), who engages in or carries on or undertakes or causes to be undertaken a housing development.”
This meant that after Dec 1, 2002, the exempted developers described above come within the purview of Act 118 and the Regulations. Any society, co-operative or state or statutory corporation who undertakes a housing development will now have to apply for the requisite developer’s license and the requisite advertisement and sales permit, prior to the launching of the units of housing accommodation for sale to the public.
The contract of sale entered into between the society, cooperative or state or statutory corporation and the purchasers are required to be in the form prescribed in Schedule G or Schedule H of the Regulations.
Amendment to Act 118 in 2007
There have been concerns expressed by certain purchase as to whether transaction with these societies, co-operatives, state or statutory corporations are governed by the recent amendments to Act 118 which came into force on 12th April 2007.
A new Section 22D of Act 118, stipulates that the consent of the housing developer is not required for an absolute assignment of the proprietary right or interest in a housing accommodation, provided that a proper notice of the assignment has been given to the housing developer in accordance with the provisions contained in Section 22D.
Section 22D applies to any housing accommodation where separate or strata title for the housing accommodation has not been issued by the appropriate authority and it is clear that this new Section 22D will apply to any such transactions with these societies, co-operatives, state or statutory corporations.
Conclusion
With the inclusion of societies, co-operatives, state or statutory corporations in the definition of “housing developer”, there is now better protection for purchasers who purchase properties developed by these developers, and purchasers no longer have to worry about the terms and conditions contained in the contract of sale as it would have to be in the form prescribed in Schedule G or Schedule H of the Regulations.
The writer is a member of the Conveyancing Practice Committee, Bar Council, Malaysia www.malaysiabar.org.my
Note: This column is brought to you by the Malaysian Bar Council for your information only. It does not constitute legal advice. You should therefore seek professional legal advice for your specific needs. Neither the Malaysian Bar nor Sun Media Corporation Sdn Bhd shall be liable to any reader who suffer losses as a result of relying on this column.
Source: TheSun, Friday, October 5, 2007
Related Blog: Interior Design Blog
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Friday, October 5, 2007
Tuesday, September 25, 2007
Understanding the New CCC
Understanding the New CCC (Certificate of Completion and Compliance
By: Y P Cheong
propertyplus@thesundaily.com
CCC stands for the certificate of completion and compliance and is a new term introduced by the Street, Drainage and Building (Amendment) Act 2007 (Amendment Act), which came into force on April 12, 2007. The CCC is meant to replace the certificate of fitness for occupation (CFO).
Under the former system, the CFO was issued by the local authority (LA) under the Uniform By-Laws of the Street, Drainage and Building Act 1974 (Act 133).
The former system was overly cumbersome, time-consuming and subject to abuse. It was not unusual for inordinate delays to occur due to many factors including: non-compliance by the developer for the submission of Form E and its enclosure to the LA, additional conditions imposed by the LA at the time of application of CFO, the involvement of many technical agencies and the lack of technical officers to process the CFO.
Purchasers of properties encounter numerous problems whenever vacant possession is delivered to them by developers and the purchasers could not occupy or renovated their properties because the CFO was not issued.
New System of CCC
The new CCC, based on self regulation, is issued by the private sector. The responsibility is transferred from the LA’s to professionals (architects, engineers and building draftsman) of the project. It seeks to provide better protection for house buyers, cut red tape or bureaucracy in local government and create a more efficient public delivery system. The CCC applies to new projects while those currently under construction will still be issued with CFOs.
Principal Submitting Person
The CCC will be issued by a principal submitting person (PSP), which is a radical chance indeed. The PSP is a professional architect, engineer or building draftsman who submits building plans to the LA for approval. He must be registered under the relevant law relating to registration thereof, e.g Architects Act 1967 or Registration of Engineers Act 1967 (Revised 1974).
The PSP’s responsibilities include submitting building plans for approval by the LA, supervising the erection and completion of the building in conformity with the approved plans and the requirements of the provisions of Acts or by-laws, ensuring all technical conditions imposed by the LA have been duly complied with and ensuring that the building is safe and fit for occupation.
Six Essential Services for Issuance of CCC
There are six essential services for the issuance of CCC:
>>Confirmation of electrical supply (TNB)
>>Confirmation of water supply (water authorities)
>>Confirmation of connection to sewerage treatment plant or mains (JPP)
>>Clearance form lifts and machinery department, if applicable (JKKP)
>>Clearance for active fire fighting systems except for residential building not more than 18m high (Bomba)
>>Roads & Drainage
Rectification by LA
The LA may inspect the building site at any time on its own initiative or due to complaints. In the event of failure to comply with the approved plans, the Act or by-laws in the erection and construction of the building, the LA may issue to the PSP:
(a) A written notice requiring compliance within a period specified in the notice, as the Local Authority thinks fit, in order that the non-compliance be rectified; and
(b) A directive in writing to withhold the issuance of CCC until such non-compliance has been rectified.
The LA may itself cause any work to be executed or any measure to be taken if it considers such work or measure is necessary to rectify the non-compliance of its directive and the costs shall be borne by the owner of the building. The costs shall not be subject to any appeal or review in any court.
The LA is also responsible for approving permission of planning application and building plans: pressing charges against the PSP and professionals and reporting to the relevant professional board; inspection of old buildings and continuing to issue CFO’s for projects approved before the CCC’s date of enforcement.
Offences Under The New System
The Amendment Act has introduced the following new offences and penalties:
>>Not a PSP but issues a CCC;
>>Issues CCC without forms (relevant forms under by laws);
>>Issues CCC despite direction to withhold – in contravention to direction of LA to withhold issuance;
>>False/fraudulent declaration:
Knowingly makes/producers/causes to be made any false or fraudulent declaration, certificate, application or any form under by-laws knowing it/they have been forged, altered or counterfeited;
>>Use knowingly: Uses the above form knowing it/they have been forged, altered or counterfeited:
>>Occupation without CCC; Occupies or permits to be occupied any building or part thereof without a CCC (This has a wide-ranging effect as it can cover purchasers, tenants, occupiers, owners, trustees, etc):
>>Liable on conviction to fine not more than RM250,000 or imprisonment not more than 10 years or both: and
>>Increased general penalty; The penalty for the offence of not abiding by the orders of the LA is increased and includes imprisonment for term not exceeding three years and a fine of up to RM10,000
Offences by Architects
False and negligent certification of the CCC by an architects is an offence under the Architect (Amendment) Act 2007 and is grounds for disciplinary action. An enhanced penalty may be imposed by the Disciplinary Committee. The fine is increased form RM10,000 to RM50,000 and the period of suspension of registration is increased form one, to two years.
Offences by Engineers
The Registration of Engineers (Amendment) Act 2007 established a disciplinary committee that is empowered to conduct a hearing of any misconduct or complaint made against any registered Engineer referred to it by an Investigating Committee. In the case of false or negligent certification of the CCC, the fine is increased to RM50,000 and the period of suspension is increased to two years.
Offences Under the Housing Development (Control and Licensing) Act 1966
In a related matter, section 22F(1) of the 1966 Act provides that any architect or engineer, as the case may be, who issues a progress certification knowing that the works therein referred to have not been completed in accordance with the provisions of the sale and purchase agreement shall be guilty of an offence and shall, on conviction, be liable to fine which shall not be less that RM 10,000 but which shall not exceed RM 100,000 or to improvement for a term not exceeding five years or to both.
Sub-section 22F(2) also provides that any person who knowingly and willfully aids, abets, counsels, procures or commands the commission of an offence under subsection 22F(1) shall be liable to the punishment provided for the offence.
Saving Provisions
The former system of issuance of CFO continue to apply where:
>>Work of erection has not commenced within 12 months from date on which plans and specifications of building were approved; if work commenced on or after April 12, 2007 (Commencement Date), (without prejudice to any penalty):
>>Work of erection commenced immediately before commencement date;
>>Work suspended immediately before coming into operation of Act and is to resume on after Commencement Date; and
>>Erection of building without approval of plans and specifications by the LA under the Act immediately before Commencement Date provided that an application for approval is made to the LA on or after Commencement Date and the application is approved.
The writer is a member of the Conveyancing Practice Committee, Bar Council, Malaysia www.malaysianbar.org.my
Note: This column is brought to you by the Malaysian bar Council for your information only. It does not constitute legal advice. You should therefore seek professional legal advice for your specific needs. Neither the Malaysian Bar nor the Sun Media Corp Sdn Bhd shall be liable to any reader who suffers losses as a result of relying on this column.
Source: TheSun, September 1, Friday, 2007
Related Blog: Interior Design Blog
By: Y P Cheong
propertyplus@thesundaily.com
CCC stands for the certificate of completion and compliance and is a new term introduced by the Street, Drainage and Building (Amendment) Act 2007 (Amendment Act), which came into force on April 12, 2007. The CCC is meant to replace the certificate of fitness for occupation (CFO).
Under the former system, the CFO was issued by the local authority (LA) under the Uniform By-Laws of the Street, Drainage and Building Act 1974 (Act 133).
The former system was overly cumbersome, time-consuming and subject to abuse. It was not unusual for inordinate delays to occur due to many factors including: non-compliance by the developer for the submission of Form E and its enclosure to the LA, additional conditions imposed by the LA at the time of application of CFO, the involvement of many technical agencies and the lack of technical officers to process the CFO.
Purchasers of properties encounter numerous problems whenever vacant possession is delivered to them by developers and the purchasers could not occupy or renovated their properties because the CFO was not issued.
New System of CCC
The new CCC, based on self regulation, is issued by the private sector. The responsibility is transferred from the LA’s to professionals (architects, engineers and building draftsman) of the project. It seeks to provide better protection for house buyers, cut red tape or bureaucracy in local government and create a more efficient public delivery system. The CCC applies to new projects while those currently under construction will still be issued with CFOs.
Principal Submitting Person
The CCC will be issued by a principal submitting person (PSP), which is a radical chance indeed. The PSP is a professional architect, engineer or building draftsman who submits building plans to the LA for approval. He must be registered under the relevant law relating to registration thereof, e.g Architects Act 1967 or Registration of Engineers Act 1967 (Revised 1974).
The PSP’s responsibilities include submitting building plans for approval by the LA, supervising the erection and completion of the building in conformity with the approved plans and the requirements of the provisions of Acts or by-laws, ensuring all technical conditions imposed by the LA have been duly complied with and ensuring that the building is safe and fit for occupation.
Six Essential Services for Issuance of CCC
There are six essential services for the issuance of CCC:
>>Confirmation of electrical supply (TNB)
>>Confirmation of water supply (water authorities)
>>Confirmation of connection to sewerage treatment plant or mains (JPP)
>>Clearance form lifts and machinery department, if applicable (JKKP)
>>Clearance for active fire fighting systems except for residential building not more than 18m high (Bomba)
>>Roads & Drainage
Rectification by LA
The LA may inspect the building site at any time on its own initiative or due to complaints. In the event of failure to comply with the approved plans, the Act or by-laws in the erection and construction of the building, the LA may issue to the PSP:
(a) A written notice requiring compliance within a period specified in the notice, as the Local Authority thinks fit, in order that the non-compliance be rectified; and
(b) A directive in writing to withhold the issuance of CCC until such non-compliance has been rectified.
The LA may itself cause any work to be executed or any measure to be taken if it considers such work or measure is necessary to rectify the non-compliance of its directive and the costs shall be borne by the owner of the building. The costs shall not be subject to any appeal or review in any court.
The LA is also responsible for approving permission of planning application and building plans: pressing charges against the PSP and professionals and reporting to the relevant professional board; inspection of old buildings and continuing to issue CFO’s for projects approved before the CCC’s date of enforcement.
Offences Under The New System
The Amendment Act has introduced the following new offences and penalties:
>>Not a PSP but issues a CCC;
>>Issues CCC without forms (relevant forms under by laws);
>>Issues CCC despite direction to withhold – in contravention to direction of LA to withhold issuance;
>>False/fraudulent declaration:
Knowingly makes/producers/causes to be made any false or fraudulent declaration, certificate, application or any form under by-laws knowing it/they have been forged, altered or counterfeited;
>>Use knowingly: Uses the above form knowing it/they have been forged, altered or counterfeited:
>>Occupation without CCC; Occupies or permits to be occupied any building or part thereof without a CCC (This has a wide-ranging effect as it can cover purchasers, tenants, occupiers, owners, trustees, etc):
>>Liable on conviction to fine not more than RM250,000 or imprisonment not more than 10 years or both: and
>>Increased general penalty; The penalty for the offence of not abiding by the orders of the LA is increased and includes imprisonment for term not exceeding three years and a fine of up to RM10,000
Offences by Architects
False and negligent certification of the CCC by an architects is an offence under the Architect (Amendment) Act 2007 and is grounds for disciplinary action. An enhanced penalty may be imposed by the Disciplinary Committee. The fine is increased form RM10,000 to RM50,000 and the period of suspension of registration is increased form one, to two years.
Offences by Engineers
The Registration of Engineers (Amendment) Act 2007 established a disciplinary committee that is empowered to conduct a hearing of any misconduct or complaint made against any registered Engineer referred to it by an Investigating Committee. In the case of false or negligent certification of the CCC, the fine is increased to RM50,000 and the period of suspension is increased to two years.
Offences Under the Housing Development (Control and Licensing) Act 1966
In a related matter, section 22F(1) of the 1966 Act provides that any architect or engineer, as the case may be, who issues a progress certification knowing that the works therein referred to have not been completed in accordance with the provisions of the sale and purchase agreement shall be guilty of an offence and shall, on conviction, be liable to fine which shall not be less that RM 10,000 but which shall not exceed RM 100,000 or to improvement for a term not exceeding five years or to both.
Sub-section 22F(2) also provides that any person who knowingly and willfully aids, abets, counsels, procures or commands the commission of an offence under subsection 22F(1) shall be liable to the punishment provided for the offence.
Saving Provisions
The former system of issuance of CFO continue to apply where:
>>Work of erection has not commenced within 12 months from date on which plans and specifications of building were approved; if work commenced on or after April 12, 2007 (Commencement Date), (without prejudice to any penalty):
>>Work of erection commenced immediately before commencement date;
>>Work suspended immediately before coming into operation of Act and is to resume on after Commencement Date; and
>>Erection of building without approval of plans and specifications by the LA under the Act immediately before Commencement Date provided that an application for approval is made to the LA on or after Commencement Date and the application is approved.
The writer is a member of the Conveyancing Practice Committee, Bar Council, Malaysia www.malaysianbar.org.my
Note: This column is brought to you by the Malaysian bar Council for your information only. It does not constitute legal advice. You should therefore seek professional legal advice for your specific needs. Neither the Malaysian Bar nor the Sun Media Corp Sdn Bhd shall be liable to any reader who suffers losses as a result of relying on this column.
Source: TheSun, September 1, Friday, 2007
Related Blog: Interior Design Blog
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