House buyers group says PH continuing BN practice of allowing extensions for developers

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Developers are supposed to complete a unit within two to three years depending on the type of property.

PETALING JAYA: The National House Buyers Association (HBA) has hit out at the government for continuing the former administration’s practise of giving property developers extensions of time (EOT) to deliver newly completed homes to buyers without valid reasons.

This comes after the housing and local government ministry revealed the high number of EOT approvals given to developers since 2018.

Housing developers are supposed to complete a unit and hand over the keys to a buyer within 24 months (for landed property) or 36 months (for stratified property) of the signing of the sales and purchase agreement, failing which they will have to pay the buyer compensation known as liquidated ascertained damages (LAD).

But the delivery date can be postponed without the need to pay compensation if the developer can get an EOT from the housing controller or housing and local government minister due to “special circumstances”.

HBA secretary-general Chang Kim Loong told FMT he was disappointed that the ministry had approved 75% or 46 EOT applications between January and July and 78% or 93 EOT applications in 2018.

Chang, who in the past criticised the Barisan Nasional government for giving EOTs at the expense of house buyers, said the reasons cited by the ministry were “unacceptable”.

Earlier this week, the ministry in a written reply to a query in the Dewan Rakyat cited a number of reasons for giving EOTs including local council limits on working hours at construction sites, compliance with infrastructure requirements like the Integrated Water Supply Scheme, the construction of buildings which are higher than 30 floors, and the need for additional foundation works.

Other reasons mentioned were the need to construct podiums and basements, and considerations over the location of a project, including restrictions due to proximity to schools.

The ministry also said as a matter of policy, EOTs are only considered for projects with no buyers.

But Chang said these were not valid reasons to delay a project and instead reflected poor planning and project management by developers.

“All of these issues boil down to the developers not doing their homework, it is as simple as that. These should be factored into their planning before they apply for a licence to sell the properties.

“People purchase homes with plans to start families or move closer to work and so on. When we keep delaying the projects, we are effectively derailing these peoples’ lives and plans.”

The government, he said, should be looking after the interests of the people and not irresponsible developers.

Although the law did not specify the “special circumstances”, Chang said poor planning and project management should not be seen as a special circumstance but as “incompetence”.

“It’s self-inflicted. If there are unforeseeable circumstances like an earthquake or civil unrest, then an EOT is reasonable, but if a developer does not do his homework properly, house buyers should not be denied their rights to compensation.”

Chang also questioned the logic behind the ministry’s remark that EOTs are only considered for projects with no buyers.

“How can an EOT be granted if a SPA has not commenced?”