Apex court ruling on Danga Bay housing issue timely, housing tribunals must act within scope

THE recent Federal Court ruling to limit housing tribunals powers in resolving disputes between homebuyers and property developers would stabilise the industry and alleviate concerns by the latter.

“The apex court has ruled that the Tribunal for Homebuyer Claims can only decide on claims based upon the express terms of the sale and purchase agreement (S&P), not on the purchaser’s expectations of the unit purchased corresponding with a display model at the developer’s showroom.

“This landmark decision also ruled that once the homebuyer had taken possession, inspected and renovated the premises, he is estopped in law to maintain a claim that he has been allotted the wrong unit by the developer,” lawyer Leonard Yeoh told FocusM.

In 2018, the housing tribunal in Johor Bahru awarded Singaporean, Ho Chee Kian, RM50,000 in compensation for receiving a unit from Johor-based property developer, Country Garden Danga Bay Sdn Bhd (CGDB) which was claimed not adhering to the specifications.

Both the High Court and Court of Appeal dismissed CGDB’s appeals on Dec 27, 2018 and Dec 11, 2019, respectively, on grounds it had no merit.

But yesterday, the Federal Court ruled in favour of CGDB, saying that housing tribunals could only decide on disputes between home buyers and developers, as stated in the S&P.

The three-member bench, chaired by Datuk Zaleha Yusof, said buyers’ claim that they were allotted wrong units by the developer would not be maintainable after they had taken vacant possession, inspected and renovated their homes.

Ho was ordered to pay RM30,000 in costs to the company, which is the developer of the Danga Bay project.

Yeoh and Cyrus Das served as legal counsel for CGDB on the case.

A relief to property developers

Touching on the matter, Yeoh said that CGDB was relieved by the decision, saying it would set a precedent that would disallow buyers from taking advantage over a developer’s project over issues which are not provided expressly in the S&P, by running to the Tribunal for Homebuyer Claims.

As for the housing tribunal, Yeoh said the Federal Court agreed that the former had exceeded their authority by ordering CGDB to compensate Ho for the matter.

“This is not about the RM50,000 compensation alone. If we allow the housing tribunal’s decision to stay, it will set a dangerous precedent.

“We’re thankful that the Federal Court overturned the decision and put the housing tribunal back to its scope of authority,” he remarked. – Feb 11, 2021.

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