Partial certification unacceptable for housing projects

By Chang Kim Loong

SOME practising lawyers, with obvious allegiance to housing developer groups, seem to suggest that there is a “legislative contradiction” or “anomaly” when the Strata Title Act (STA) 1985 (Act 318) and the Uniform Building By-Law (UBBL) 1984 (Amendment 2007) are read together with the Housing Development (Control & Licensing) Act (HDA) 1966 (Act 118).

They elaborated that where the STA endorses phased development in the form of provisional blocks, the UBBL facilitates the fitness worthiness for such partial occupation in the form of a Partial Certificate of Completion and Compliance (Partial CCC) or Form F1. However, there is no such corresponding/complementing provision under the HDA to accommodate such practice. On the contrary, the HDA forbids use of Partial CCC in delivery of vacant possession to buyers.

I have been prompted by various professionals in the business and readers to rebut the perception to avoid confusion. The following is my take on the subject matter:

The laws

To construe the difference in intention and emphasis of these legislations is somewhat misplaced.

These so-called contradiction/anomaly can easily be reconciled and addressed through the legal maxim of Generalia Specialibus Non Derogant, which means for the purposes of interpretation of two statutes in apparent conflict/contradiction, the provisions of a general statute must yield to those of a special one.

Let’s look at the intention and emphasis of these individual legislations and the controversial Partial CCC.

Strata Title Act 1985 (Act 318)

Act 318 is a piece of primary legislation which governs the subdivision of buildings into parcels with the issue of strata titles. It covers housing and non-housing buildings such as commercial properties in the form of office space, and retail outlets.

Uniform Building By-Law (UBBL) 1984 (Amendment 2007)

UBBL is a secondary legislation which, among others, regulates building codes for buildings. In general, it covers housing and non-housing buildings such as commercial, institutional, public and other private buildings.

The Partial CCC

The rationale for the Partial CCC is to allow a part of a partially completed building to be occupied provided it is always self-functioning and sustaining with all the essential services and amenities serving the part which is duly completed.

An example would be a podium for a shopping mall with office tower block.

Housing Development (Control & Licensing) Act 1966 (Act 118)

Act 118 is a statute to provide for the control and licensing of the business of housing development in Peninsular Malaysia, the protection of the interest of purchasers and for matters connected with it. In other words, HDA is a specialised legislation dealing with housing issues under its strict provisions.

The intention and emphasis of Act 118 is best illustrated by the Federal Court on Nov 26, 2019, in its judgment in the landmark case known as Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar & Pengawal Perumahan, which ruled that the housing controller has no power to waive or modify provisions of the contracts of sale as prescribed by regulations 11(1) and (2) of the Housing Development (Control and Licensing) Regulations, 1989 (1989 Regulations).

Social legislation

Chief Justice Tan Sri Tengku Maimum Tuan Mat had emphasised in no uncertain terms in the judgment that Act 118 (Housing Development [Control & Licensing] Act 1966) is a “social legislation” intended to protect house buyers. The interests of the purchasers shall be the paramount consideration against the developer.

Henceforth, the non-provision/application of Partial CCC can hardly be construed as contradiction/anomaly at odds with the other two pieces of legislation; in fact it was the intention of the Act.

This can be inferred from the fact that Partial CCC was explicitly precluded as one of the quintessential vacant possession conditions:

i) Sect 3 of the Housing Development (Control & Licensing) Act 1966 (Act 118);
ii) Clause 1(b) Schedule G; and
iii) Clause 1(c) Schedule H, Clause 1(b) Schedule I and Clause 1(c) Schedule J.

The exclusion is a testament that the issue of Partial CCC had indeed been deliberated, considered and left out for good measure.

Partially completed scheme due to phased development is known to have created a litany of problems for the purchasers/owners/occupants inter-alia:

i) The incompleteness of the overall neighbourhood for the occupants of the earlier phases in the event where the developer abandons the project half way or is unable to continue with the subsequent phases due to financial burden or winding up.

An example would be a podium for a shopping mall with residential tower block(s) sitting on top of it. What would happen if the developer abandons the construction of the podium block after the issuance of Partial CCC to the purchasers of the residential tower block(s) due to low take-up of the retail outlets?

The purchasers will have to put up with the partially completed structure and worse, if they have to walk through such partially completed structure if both the podium and tower block(s) happen to share a common access. The abandoned podium will become a breeding ground for mosquitoes, rats and insects as well as other undesirable elements.

Hence, the abandoned structure of the podium will not only be an eyesore in the neighbourhood but also the direct cause of a drop in value of the residential property in the earlier phases.

ii) Even if the podium phase is not abandoned, the subsequent ongoing construction where cordoning/ partitioning is required between the phased developments will create a host of potential security threats, as well as safety and health hazards such as noise and dust pollution to the purchasers of the earlier phase/s as well as to the neighbourhood.

Hence, the drafters of the legislation in their wisdom did not see it fit to include Partial CCC with the CCC in the best interests of the house buyers, notwithstanding it was provided under the UBBL.

This decision is in line with the legal maxim of Generalia Specialibus Non Derogant where the general legislations of STA and UBBL must yield to the specialised one, to wit, the HDA in delivery of vacant possession. Thus, the issue of contradiction/anomaly does not arise at all.

In reality, the situation is such that the number of abandoned and “sick” projects still languishes at a staggering 360-plus cases as at 2019 with no sign of abating anytime soon.

Also, perusing the list of blacklisted developers at the Ministry of Housing and Local Government website (www.kpkt.gov.my), the number of errant developers will invariably prompt one to ask Who is not on the list of errant developers? rather than Who is on the list.

Further, shoddy workmanship is rampant in the industry.

The exclusion of Partial CCC from the HDA represents only a small step in pre-empting and mitigating the potential harm that could be inflicted on the unwary and innocent house buyers, who have suffered in silence for perhaps far too long. – April 7, 2020

Datuk Chang Kim Loong is secretary-general of the National House Buyers Association (HBA)

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