What You Need To Know About Homebuyer’s Tribunal
by Denise Lim & Clinton Tan ~ 13 February 2019
Are you a homebuyer who wants to sue your housing developer but cannot afford the legal fees to bringe housing developer to Court? Perhaps you want to claim liquidated and ascertained damages or deposit that the housing developer is refusing to pay to you?
Instead of going through the expensive and time consuming process of suing the housing developer in Court, you should consider making your claim in the Homebuyer’s Tribunal.
What is a Homebuyer’s Tribunal?
The Homebuyer’s Tribunal, or more formally known as the Tribunal for Homebuyer Claims, was established in 2002 by the Government as an “easier, cheaper and quicker” avenue for homebuyers to obtain damages or compensation from the housing developers.
The Homebuyer’s Tribunal commonly deals with claims relating to:
- Defective workmanship;
- Defective materials;
- Property not constructed in accordance to the approved plans stated in the Sales and Purchase Agreement (“SPA”);
- Late delivery of vacant possession of the property;
- Late delivery of common facilities;
- Payment of liquidated and ascertained damages claims (“LAD”);
- Refund of deposit; and
- Refund of late interest charges.
This list is by no means exhaustive. In fact, under the Housing Development (Control and Licensing) Act 1966, the Homebuyer’s Tribunal has the power to determine on any claim lodged by the homebuyer for any loss suffered or any matter concerning the homebuyer’s interest as a homebuyer arising out of the Sale and Purchase Agreement.
However, it should be noted that the Homebuyer’s Tribunal is not able to determine claims of the following nature:
- For the recovery of land; and
- If the dispute concerns:
- The entitlement of any person under a will, settlement or intestacy;
- Goodwill; or
- Any trade secret or intellectual property right, such as copyrights, trademarks, etc.
Is Your Claim Suitable for the Homebuyer’s Tribunal?
The Homebuyer’s Tribunal can only deal with claims worth RM 50,000.00 or below. This means that the maximum amount the Homebuyer’s Tribunal can award a homebuyer is RM 50,000.00.
However, the Tribunal may still hear the claim where it exceeds RM50,000.00 if both parties agree in writing for the Tribunal to hear the claim or where the homebuyer limits his claim to only RM 50,000.00. Knowing this, if the intended claim is worth much more than RM 50,000.00, it is probably the wiser option to simply proceed to bring legal proceedings in Court to obtain a judgement against the housing developer. This will depend on the unique circumstances and on the facts of the case.
It should also be noted that a claim made to the Homebuyer’s Tribunal must be made within 12 months from either:
- The date of issuance of the certificate of completion and compliance (“CCC”) of the property;
- The expiry of the defects liability period as set out in the Sales and Purchase agreement (“SPA”); or
- The date of termination of the sale and purchase agreement if the agreement was terminated before the date of issuance of the CCC.
If the claim is not brought to the Homebuyer’s Tribunal within this time, it can no longer be brought to the Tribunal. In that situation, the only option left will be to bring the claim to the Court. Such a claim to Court (which will likely be a claim for either a breach of contract or negligence) has to be brought to Court within 6 years from the date of the breach of contract or from when, loosely put, the ‘negligent act’ occurred.
What are the Advantages of the Homebuyer’s Tribunal?
There are numerous advantages of bringing a claim to the Homebuyer’s Tribunal, with the main advantages being:
1. That no lawyer is required
Since it is meant to be a simple, easy and quick way for homebuyers to obtain an award against the developers, it is less formal than normal Court proceedings and involves less legal language. Homebuyers will usually represent themselves as lawyers are not usually allowed to represent the homebuyers in the Tribunal unless the Tribunal decides that the matter involves complex questions of law and that a party would suffer severe financial hardship if he does not have a lawyer.
2. It gives you a legal “Award”
This “Award” is as effective and binding as if it were a Court judgement. In fact, should the housing developer still refuse to comply with the Award after it is made, this Award can be enforced by Court against the housing developer, by methods such as winding-up the company, by bringing a judgment debtor summons, garnishee proceedings, etc.
In addition, by failing to comply with the Award, the housing developer might also become liable to pay a fine of around RM 10,000.00 to RM50,000.00 or may be imprisoned for not more than 2 years or be subject to both.
3. It is a cheaper than Court proceedings
Not only can the homebuyer save on legal fees from his/her lawyer but the fees for filing the documents are also cheaper as well at only RM10.00 to file a claim. So overall, the homebuyer will in theory be able to keep almost all of the money or compensation granted to him/her under the Award.
4. It is faster than Court proceedings
A Tribunal usually has to make its award within 60 days from the first day of the hearing. This is much faster than Court proceedings which would usually take a minimum of 6 months, assuming that there is no delay to the matter or any appeals made against the decision given Court.
5. The Tribunal can award monies or make a party comply with the SPA
The Tribunal has considerable power to grant Awards which may require one or more of the following:
(a) That a party of the proceedings pay money to the other party;
(b) That the money already paid by the homebuyer is refunded;
(c) That a party comply with the Sale and Purchase Agreement;
(d) That compensation is paid for any loss or damage suffered by the person bringing the claim;
(e) That the contact is varied or set aside;
(f) That costs and/or interest be paid to any party;
(g) That the claim is dismissed.
How to File a Homebuyer’s Tribunal Claim?
The following websites are a good starting point and provide the necessary forms and/or procedures for filing a claim in the housing tribunal:
Stay tuned for our follow up article on the steps and procedures of bringing a claim to the Homebuyer’s Tribunal!