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Ridiculous to Increase the Housing Tribunal's Jurisdiction to RM250,000

May 28, 2024

Ridiculous to Increase the Housing Tribunal's Jurisdiction to RM250,000

The Tribunal for Homebuyer Claims, also known as the Housing Tribunal (Tribunal), was intended to be 'fast,' 'affordable,' and simple. How does increasing the Housing Tribunal's monetary jurisdiction to RM250,000 from the current limit of RM50,000 benefit house buyers? Don’t be mistaken in assuming that with a filing fee of RM10.00, you can swiftly recover your claim for LAD (Liquidated Ascertained Damages) of RM250,000 from your housing developer through the Tribunal if you think it is that straightforward.

Stakeholders Meeting in regards to the amendments to HDAct and its’ HDReg

As early as 18.8.2020, under the previous Government and the Ministry of Housing & Local Government (KPKT), then headed by YB Datuk Hjh Zuraidah Kamaruddin, the National House Buyers Association (HBA) was involved in a series of consultations under the subject: MAKLUM BALAS PEMEGANG TARUH BAGI SESI PERBINCANGAN KUMPULAN FOKUS (FGD) SIRI 1/2020 BAGI KAJIAN CADANGAN DAN PENGGUBALAN PINDAAN AKTA PEMAJUAN PERUMAHAN (KAWALAN DAN PELESENAN) 1965 DAN PERATURAN-PERATURAN (AKTA 118). Subsequently, we were also involved in follow-up consultations and have continued to offer input and feedback on 28.1.2021 and 26.7.2022 under YB Dato Seri Reezal Merican, the immediate past Minister of Housing, and the latest meeting was held on 26.6.2023 at Bahagian Perancang Perumahan chaired by Puan Rosidawati bte Abd Rashid.

We had wondered whether the current KPKT Minister, YB Menteri Nga Kor Ming, has been competently and adequately briefed, in a satisfactory manner, on the draft proposals, amendments, additions, and forms initiated by the then Government (2 Ministers ago) regarding the proposed amendments to the Housing Development (Control & Licensing) Act, 1966 (HDAct), HD Regulations (HDReg), Scheduled Sale & Purchase Agreements, and Directions to understand their wide ramifications and implications to the housing industry, especially the house buyers.

One of the many ludicrous proposals was the increase of the monetary jurisdictional power of the Tribunal from the current RM50,000 to a five-fold increase to RM250,000. That is a hefty sum and a BIG-ticket item.

Below is an excerpt of the current Section 16M of the HDAct:

PART VI Section 16M: Jurisdiction of Tribunal

Subject to section………. the Tribunal shall have the jurisdiction to determine a claim lodged under section……… where the total amount for which an award of the Tribunal is sought does not exceed fifty (RM50,000) thousand ringgit.

Ill-Advised or Unadvised Proposal

KPKT thinks that it is doing aggrieved house buyers a great favor by increasing the monetary jurisdiction of the Tribunal from the current RM50,000 to RM250,000. KPKT expects house buyers to rejoice. KPKT could not accord us a logical explanation except to state that, inter alia:

  • It was the then Housing Minister’s Datuk Hjh Zuridah Kamaruddin’s proposal.
  • That the monetary increase will correspond with the jurisdictional increase in the Consumer Tribunal from RM25,000 to RM50,000.
  • That the increase is in line with the current monetary jurisdiction of the Strata Management Tribunal i.e. RM250,000.

We really cannot fathom the motives of such a move. Is it a regressive proposal or a progressive one? Read on and understand better.

HBA’s Objections and Rationale

There are potential drawbacks and repercussions to consider when KPKT and their Minister made such a proposal. Here's a breakdown of the rationale for retaining the existing monetary claim limit of RM50,000:

  • Tribunal decisions are subject to judicial review (JR). Since the proposed amount is to be increased to RM250,000, there is more reason for housing developers to file for a judicial review rather than settle or obey the Award. Thus, the Award will be rendered redundant.

  • Since lawyers are not permitted in the Tribunal, it is prejudicial to the weaker party, that is, house buyers, to proceed with large claims. Lay-buyers will not be properly advised of their legal rights and entitlements.

  • Whatever is stated in the testimony at the trial at the Tribunal level will be recorded and used as evidence if the case is escalated to the High Court for JR.

  • The trend today is for developers to employ in-house lawyers/law degree holders to represent them at the Tribunal and argue with case laws, authorities, and expert witnesses, etc. Their 'expert witnesses' could be their architects, engineers, land surveyors, building inspectors, lawyers, water leakage experts, and a host of others under their payroll. Each of them may have a pecuniary interest in the project in that they were involved in it. It will be a case of David vs. Goliath. Can aggrieved buyers defend themselves effectively?

  • It defeats the very purpose of having the Tribunal in the first place if lawyers are allowed at the Tribunal. Affected house buyers – the victims -- might as well file their cases in the Courts of Law from the onset.

  • Obviously, large claims will open the floodgates to JR by the Developers battalion of ‘free’ lawyers, while the house buyers have to stomach the legal fees and expenses all by themselves. If they file their case in their own name, the JR process will obviously be against them in their personal capacity.

  • Who is in control of the game? It’s obviously the Developers. If the monetary claims increase to RM250,000.

  • The increase is both impressive and misleading. It gives false hope and impression to the house buyer. There is no kindness in offering false hope. KPKT is in fact doing a disservice and grave injustice to the naive and innocent house buyers. They are being lulled into a false sense of belief.

    and

  • The higher the stake, the higher the possibility that the Developer will go even to the Apex Court. It would be worth their effort to conveniently delay the case for obvious reasons until the liquidation process proceeds.

Strata Management Tribunal Deals with BIG Ticket Items

If the Minister aspires to increase the jurisdiction of the Housing Tribunal to RM250,000 in line with the Strata Management Tribunal (SMT), which is currently at RM250,000, then the Minister has been ill-advised for the following reasons:

  • Strata Management Tribunal is just not restricted to housing per se; it includes ‘commercial development’ like mixed developments, strata shops, shopping malls, office complexes, strata factories, etc.

  • Their claims include common property/facilities, common funds of all owners/proprietors.

  • Their claims also include BIG ticket items involving sinkage in the common roof, cracks in the facade, defects and repair costs to the swimming pool, faulty passenger lifts, defective sauna and steam facilities, motor room, cooling tower, elevators, plumbing issues, and a host of other items.

  • The claimants in SMT cases, apart from an individual, are the management bodies like Joint Management Body (JMB), Management Corporation (MC), and Subsidiary Management Corporation (SubMC), property developers, proprietor (including an original proprietor), managing agent, and a host of other stakeholders.

Increase Should Not Exceed Magistrate Court’s Jurisdiction

If the Minister feels that the quantum of RM50,000 in the Housing Tribunal should be increased, perhaps any increase should not exceed the monetary jurisdiction of the Magistrate’s Court, i.e., RM100,000.

After all, the Award of the Tribunal, in the event of non-compliance under Section 16AD, is registered at the Magistrate’s Court for execution processes and prosecution purposes.

Be Cautioned

Please do not make proposals arbitrarily without first considering the big picture. The Minister has to take into consideration the possible actions and reactions of developers, who obviously are profit-driven, as well as the little guy, aka the house buyer who thinks that the government is always right.

This article is written by Datuk Chang Kim Loong, the Honorary Secretary-General of the National House Buyers Association (HBA), a non-profit, non-governmental organisation manned by volunteers. He was also a Councillor with the then Subang Jaya Municipality Council (now conferred Subang Jaya City Council status) in years 2008 – 2018.

Disclaimer: Any opinions expressed are entirely the author’s own and do not necessarily reflect the views of PropertyGuru and its entities.

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