Published on 20 April 2020 by Teo Qing Qing

Introduction 

Due to the Covid-19 Pandemic, construction of housing development has been put on hold until the Movement Control Order (“MCO”) which took effect from 18th March 2020 and extended to 28th April 2020 is lifted or ordered otherwise by the Malaysian Government. Notwithstanding the same, the clock is ticking for the housing developers to complete and deliver vacant possession to purchasers as agreed in their Sale and Purchase Agreements.

Unfortunately, the Housing Development (Control and Licensing) Act, 1966 and the Housing Development (Control and Licensing) Regulations, 1989 which govern the business of housing development in Peninsular Malaysia aim to protect mainly the interests of purchasers.

Sale and Purchase Agreements for housing projects statutorily prescribed by the abovementioned Act and Regulations must be strictly adhered to without variation. Developers of such a housing development are not allowed to delay or extend time to deliver vacant possession to purchasers.

A developer cannot now seek an extension of time from the Controller as the Federal Court in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor and other Appeals [2019] 1 LNS 1741 held the Controller has no power to grant any extension to a developer to complete a housing development.

However, the Federal Court in Ang Ming Lee’s case did not express any view as to whether the Minister may grant the housing developer an extension of time. It remains open whether a Minister is able to grant an extension of time to developers to complete their housing projects where genuine delays are caused by unforeseeable circumstances such as the Covid-19 pandemic and the MCO.

Due to the uncertainty and resulting hardship faced by Developers, they may seek assistance from the Minister pursuant to Section 12 of the Housing Development (Control and Licensing) Act, 1966 or alternatively, secure Purchasers agreement to extend time to deliver vacant possession with a waiver of their claims for Liquidated Ascertained Damages (“LAD”).

“Pandemic Covid-19” And Housing Developers

A.   Movement Control Order

1.   In light of the recent Covid-19 Pandemic, the Government of Malaysia issued a Movement Control Order under the Prevention and Control of Infectious Diseases Act, 1988 and the Police Act, 1967 on 16th March 2020 (“the MCO”) which took effect from 18th March 2020 to 31st March 2020 and was subsequently extended to 28th April 2020.

2.   The MCO was issued to prevent and contain the spread of the COVIC-19 virus which was rapidly spreading all over the world. Pursuant to the MCO, most businesses were forced to close for the time being except those categorized as essential services under the Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations, 2020 (“the said Regulations”).

B.   Construction Industry Is Non-Essential Service

3.   The Construction Industry is not listed as an essential service under the said Regulations and consequently are not allowed to operate during the implementation of the MCO. As a result, many ongoing construction projects including housing development will undoubtedly be delayed.

4.   In the circumstances, many housing developers are uncertain whether they are able to seek an extension of time to deliver vacant possession from the date originally agreed in a Sale and Purchase Agreement.

C.   No Extension of Time

5.   The immediate answer to para 4 above is unfortunately a NO. Until or unless the Purchasers have no objection whatsoever and are agreeable to grant such an extension, Housing Developers cannot delay or extend the date of delivery of vacant possession based on the grounds set out in the headings below. 

C.1.   Housing Development - The Law

6.   Before delving deeper into this topic, the following few preliminary points of Law are worth noting: -

      6.1.   The business of housing development in Peninsular Malaysia is principally governed by the Housing Development (Control and Licensing) Act, 1966 (“the HDA 1966”).

      6.2.   To effectively carry out the provisions of the Act, the Minister is empowered under Section 24 of the HDA 1966 to make regulations to, inter alia, prescribe a statutory Sale and Purchase Agreement (“SPA”) for housing developments and/or regulate and prohibit the conditions and terms of the SPA. The Housing Development (Control and Licensing) Regulations 1989 (“the HDR 1989”) was promulgated under the Act as a result.

      6.3.   The HDA 1966 read together with the HDR 1989 aims to protect mainly the interest of the purchasers.

      6.4.   The SPA between the Developer and the Purchaser is governed by a statutory form of contract as prescribed in Schedule G or Schedule H of the HDR 1989 (“the SPA”) which binds the housing developers (“the Developers”) to fulfil their obligations towards the housing purchasers (“the Purchasers”).

      6.5.   A Developer has to complete and deliver vacant possession of the subject property to the Purchasers within 24 months (for landed housing development – see Schedule G of the HDR 1989) or 36 months (for high rise housing development – see Schedule H of the HDR 1989). If the Developer fails to deliver within the period specified, the Developer has to compensate the Purchaser by paying LAD of 10% per annum of the purchase price for late delivery as stipulated in Clause 23, Schedule G and/or Clause 26 for Schedule H, HDR 1989.

7.   Notwithstanding the above, the standard SPA provided under Section 24 of HDA 1966 and Schedules G & H of the HDR 1989 is applicable to housing development projects only. Parties in normal cases of contract not governed by the Act have freedom to make provisions between themselves.

C.2.   The SPA is Special & Not Ordinary Agreement

8.   As stated in para 6 above, the SPA executed between the Developer and the Purchaser is not an ordinary agreement but a statutory SPA entrenched as a Form in the said Schedule G or Schedule H of the HDR 1989. In short, the SPA which falls under housing development projects is a special contract/agreement which is prescribed and regulated by statute.

9.   Therefore, the Developers are obligated to ensure their housing development projects are completed within the time stipulated in the statutory SPA and cannot delay or extend the date of delivery of vacant possession as it is an attempt to vary the terms of the statutory SPA contravening the provisions in Schedule G and/or Schedule H of the HDR 1989.

10. This is supported by the case of Encony Development Sdn Bhd v Robert Geoffrey Gooch & Anor [2016] 1 CLJ 893, where the Court of Appeal held as follows:

“[1] The SPA between the plaintiffs and the defendant was governed by a statutory form of contract as prescribed in Schedule H of the Housing Development (Control and Licensing) Regulations 1989 ('the Regulations'). As such, the provisions in the SPA were not merely contractual, but were in effect statutory provisions. There was no evidential or legal basis to justify the existence of representations or assurances that sit alongside the statutory form SPA, and which were binding on the parties. There was no basis either evidentially or legally to warrant a finding that a collateral contract subsisted alongside the statutory form of contract that was the SPA. The SPA, which had statutory force, could not be effectively amended or varied by inferring the existence of a collateral contract subsisting alongside it. The terms of the collateral contract (ie, the representations) were in direct conflict with the express terms of the SPA. In these circumstances, it was untenable to maintain that the collateral contract prevailed over the statutory form contract, effectively amending and varying its content. Neither were the plaintiffs and the defendant entitled to vary or import any other terms or provisions of law in the construction of this statutory form of the SPA.”

C.3.   Force Majeure or Occurrence Outside the Control of the Developer

11. One may think of relying on force majeure or an occurrence outside the control of the Developer which caused the delay and to free the Developer of any liability. This may be a valid defence in an ordinary contract governed by the Contracts Act, 1950.

12. However as stated above, the SPA executed between the Developer and the Purchaser is not an ordinary agreement but a statutory SPA fixed by law.

13. Thus a force majeure saving clause or an occurrence beyond the control of the Developer, whether expressly stated or implied in the terms of the SPA are invalid and/or ultra vires the provisions of the HDR 1989. This is supported by the following propositions: -

      (a)   The Federal Court in S.E.A Housing Corp Sdn Bhd v Lee Poh Choo [1982] CLJ Rep 305 held that as follows:

              “It is not open to the developer to escape liability by inserting clause 32 in the agreement. Clause 32 is inconsistent with para. (r) of r. 12(1) of the Housing Developers (Control and Licensing) Rules 1970. Thus it is clear that only terms and conditions designed to comply with the requirements of the rules may be inserted in a contract of sale of land that is governed by the Act and Rules, and that on the contrary terms and conditions which purport to get round the Act and Rules so as to remove the protection of home buyers may not be so inserted.”

      (b)   The  High Court in Hedgeford Sdn Bhd v. Sri Ganatha a/l Sivanathan & Ors [2018] 1 LNS 1497 stated as follows:

              "[21] In Sentul Raya Sdn Bhd v. Hariram Jayaram & Ors And Other Appeals [2008] 4 CLJ 618 CA paragraph (8), Gopal Sri Ram JCA dealt with the same statutory provision and spoke of the inviolable position of the SPA in the following terms :

              “[8]...the contract which has fallen for construction in the present cases is a special contract. It is prescribed and regulated by statute. While parties in normal cases of contract have freedom to make provisions between themselves, a housing developer does not enjoy such freedom. Hence, parties to a contract in Form H cannot contract out of the schedule form. Terms more onerous to a purchaser may not be imposed. So too, terms imposing additional obligations on the part of the purchaser may not be included in the statutory form of contract...'."

              [22]   Consequently, it is important to recognise that the underlying SPA in the present case is no ordinary contract. On the contrary, [2018] 1 LNS 1497 Legal Network Series 11 the contract is of such a nature that it curtails the parties’ freedom of contract. It follows therefore that the developer,s and the purchasers’   hands are tied and thus both parties must comply with the terms of the statutory contract which are imposed by the law (see: Encony Development Sdn Bhd v. Robert Geoffrey Gooch & Anor [2016] 1 CLJ 893 CA at [41]).

The High Court Judge subsequently stated as follows:

              [125] But as I said, this is no ordinary contract. Instead, it is a statutory contract. And based on the principles that are to be gleaned and derived from the Oxbridge case and GJH case, it is clear that for a plea under Section 64 of the Contracts Act 1950 to be entertained, there must be convincing evidence   that the purchasers had truly and indisputably agreed to forego their contractual entitlement of LAD under clause 27 SPA."

C.4.   Housing Controller Not Empowered To Grant Extension Of Time To Developers

14. Developers may contend that they have obtained an approval for an extension of time from the Housing Controller pursuant to Regulation 11(3) of the HDR 1989 and therefore is able to extend the date of delivery of vacant possession of property to the Purchasers. Regulation 11(3) of the HDR 1989 is reproduced for ease of reference reads as follows:

“(3) Where the Controller is satisfied that owing to special circumstances or hardship or necessity compliance with any of the provisions in the contract of sale is impracticable or unnecessary, he may, by a certificate in writing, waive or modify such provisions:

Provided that no such waiver or modification shall be approved if such application is made after the expiry of the time stipulated for the handing over of vacant possession under the contract of sale or after the validity of any extension of time, if any, granted by the Controller.”

15. However, the Controller’s power to grant extensions of time to Developers was recently called into question and the same issue was canvassed by the Federal Court in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor and other Appeals [2019] 1 LNS 1741. The Federal Court held that the Housing Controller has no power to grant an extension of time to Housing Developers under the Act and that Regulation 11(3) of the HDR 1989 conferring power on the Controller to waive and modify the terms and conditions of the SPA, is ultra vires the HDA 1966.

      15.1. The background facts of Ang Ming Lee’s case can be summarized as follows:

      (a)  By the Sale and Purchase Agreement dated 3 May 2012 (“the SPA”) executed by the developer and the purchasers, it was agreed that the delivery of vacant possession of the units shall be 36 months from the date of the SPA.

      (b)  The SPA was made pursuant to the statutorily prescribed form under Schedule H of the HDR 1989.

1. Vide a letter dated 20 October 2014, the developer applied for an extension of time for delivery of vacant possession of the units to the purchasers. The application for extension of time was made to the Controller pursuant to Regulation 11(3) of the HDR 1989 based on the following grounds:

      (i)   non-stop complaints by nearby residents due to extended working hours;

      (ii)  stop work orders issued by the local authorities;

      (iii) an investigation conducted on the piling contractor.

      (d)  By a letter dated 24 October 2014, the Controller rejected the developer's application for extension of time.

      (e)  Dissatisfied with the decision of the Controller, the developer, vide a letter dated 28 October 2014, appealed to the Minister of Urban Wellbeing, Housing and Local Government ("the Minister") pursuant to Regulation 12 of the HDR 1989.

      (f)   The developer's appeal for the extension of time was purportedly allowed by the Minister. By a letter dated 17 November 2015, the Minister granted extension of 12 months to the developer. The developer thus had 48 months to deliver vacant possession of the units to the purchasers instead of the statutorily prescribed period of 36 months. As a result of the extension of time, the purchasers were unable to claim for LAD as provided for in the SPAs.

      (g)  Aggrieved by the decision of the Minister in granting the extension of time, the purchasers filed an application for judicial review against the Minister; the Controller and the developer.

      (h)  The Judicial Review Application was mounted on the argument that Regulation 11(3) of the HDR 1989 is ultra vires. The issue was first decided in High Court and later brought to Court of Appeal and subsequently the Federal Court.

      15.2. The Federal Court in Ang Ming Lee’s case succinctly pointed out the following:

      “[26] Having prescribed the Statutory Form H and the terms and conditions for the contract of sale, the Minister by reg. 11(3) of the Regulations then empowers the Controller to waive or modify the conditions and terms of the contract of sale as prescribed in Schedule H. This begs the question whether by empowering the Controller to waive or modify the conditions and terms of the contract, the Minister has exceeded the scope of the authority conferred on him by the Legislature? In other words, by empowering the Controller, through reg. 11(3), has there been an act of sub-delegation by the Minister to the Controller which is ultra vires the Act?”

      15.3. In allowing the appeal of the Purchasers, the Federal Court read s.24(2)(e) of the HDA 1966 strictly and clarified that there exists no provision within the HDA 1966 which allows the Minister to delegate its power to waive or modify provisions in the prescribed statutory SPA to the Controller of Housing:

      “[36] By section 24(2)(e) of the Act, the Minister is empowered or given the discretion by Parliament to regulate and prohibit the terms and conditions of the contract of sale… In our view, having regard to the object and purpose of the Act, the words “to regulate and to prohibit” in subsection 24(2)(e) should be given a strict construction, in the sense that the Minister is expected to apply his own mind to the matter and not to delegate that responsibility to the Controller.”

      15.4. The Federal Court held Regulation 11(3) of HDR 1989 (as passed by the Minister) was ultra vires the HDA 1966. In simpler terms, the Federal Court asserted that the Minister’s action of delegating its power to waive or modify the prescribed terms of the statutory SPA to the Controller, as exceeding what was intended by Parliament.

      15.5. The Federal Court also held that granting the extension of time to the developer in this case, the Controller had “denied the purchasers’ right to claim for Liquidated damages”, an effect which clearly went against the spirit of the HDA 1966 to protect the interest of the innocent housing purchasers.

      16. With the final decision of the Federal Court in Ang Ming Lee, it is clearly established that the Controller has no power to grant an extension of time to the Developers, be it waiving or modifying provisions of the statutorily prescribed SPA.

D.   Commentary

17. Based on the above, it is clear that the interest of the Purchasers under the Act prevails over that of the Developer. The terms and conditions of the statutorily prescribed SPA must be adhered to strictly without variation and the Developer of a housing development cannot be allowed to delay or extend time in delivering vacant possession to the Purchasers. The Developer also cannot seek extension of time from the Controller as the Federal Court has ruled that the Controller has no power to grant any extension to a developer to complete a housing development.

18. However, it is pertinent to note that the Federal Court in Ang Ming Lee’s case did not express any view as to whether the Minister himself may grant the Developer such an extension of time. It remains open whether a Minister could still grant an extension of time to the Developers to complete their housing projects especially in genuine delays which are caused by unforeseeable circumstances such as the present MCO.

19. The existence of an extension of time does not purely determine the payment of LAD to the Purchasers but it offers the Developers more time to complete the project without having to compromise on building quality or to prevent greater hardship to the Purchasers, if the Developers cannot complete the project but to abandon the same. This could lead to severe consequences in the future. Therefore, extensions of time should arguably be allowed in special circumstances or hardship or due to impossibility of complying with the provisions of the statutory SPA.

20. Due to the Covid-19 breakout, the construction of housing developments has to be put on hold until the MCO is lifted or ordered otherwise by the Malaysian Government. Unfortunately, the clock is ticking for Developers to complete and deliver vacant possession of housing units as agreed in the SPA. It would appear it is manifestly unjust to expect Developers of projects governed by the Act to complete the project within time when they are prevented from doing so by an Order of the Government. Developers are faced with a predicament of being stuck between a rock and a hard place through no fault of theirs. The lacuna in the HDA relating to extensions of time are unsatisfactory and exposes Developers to uncertainty when faced with such a predicament arising from the pandemic. It is hoped that the relevant Minister would come up with amendments to the Act allowing extensions of time or provide workable solutions to assist the Developers to weather this critical time.

E.   What Can Developers Do?

21. Notwithstanding the above, Developers under the Act may explore the following options as a lifeline to their predicament.

22. Developers may write to the Minister narrating the dilemma and/or hardship they face as a result of the MCO and seek a written direction of the Minister pursuant to Section 12 of the HDA 1966 to allow an extension of time to deliver vacant possession to Purchasers.

      22.1. Section 12 of HDA 1966 reads as follows:

      “The Minister may give to a licensed housing developer such directions as he considers fit and proper for the purpose of ensuring compliance with this Act, and any such direction shall be made in writing and shall be binding on the licensed housing developer to whom the direction is made.”

      22.2. Upon receipt of the complaint, the Minister may upon consideration give a written direction under Section 12 of the HDA 1966 to the Developers to relax the time for completion as the delay due to the Covid-19 pandemic and the MCO was beyond their control and at the same time ensuring compliance with the spirit and intention of the HDA, 1966.

      22.3. If this is the preferred option, it is advisable for Developers to notify Purchasers of their correspondence with the Minister relating to the request for an extension of time for completion and delivery of vacant possession.

23. The alternative option is for Developers to secure the agreement of Purchasers to an extension of time to deliver vacant possession as well as a waiver of the Purchasers’ claim for LAD.

      23.1. In the case of Oxbridge Height Sdn Bhd v Abdul Razak Mohd Yusof & Anor [2015] 2 CLJ 252, a settlement agreement was executed by the developer and the purchasers with the involvement of the Jabatan Perumahan Negara, where a new completion date was agreed upon and the purchasers agreed to      waive their claims for LAD until expiry of the new completion date. The Settlement Agreement was subsequently upheld by the Court of Appeal as follows:

      “(1) The respondents had expressly agreed to waive the LAD claimable under the SPA. The High Court Judge erred in his assessment of the evidence and failed to address the course of negotiations and meetings between the developer, the house buyers and JPN in the context of the development being a ‘projek  sakit’ which was delayed by force majeure. The developer made it plain that it could not continue with the project unless the LAD claims were waived in view of its financial difficulties resulting from the force majeure. (para 23)

      (2)  Vide the settlement agreement, the larger majority of the house buyers, including the respondents, agreed to a waiver, had their houses completed and delivered by the appellant within the new completion date. Despite agreeing to the waiver, the respondents still proceeded to file a claim with the tribunal and obtained the award in their favour where the LAD was calculated from the initial period of delay under the SPA. The action constituted a clear breach of the settlement agreement. (para 23)

      (3)     The signing of the settlement agreement would fall within the terms of s. 64 of the Contracts Act 1950 (‘CA’) which deals with the dispensation of a promise made to a promisee. Further, JPN was brought into the picture and kept fully appraised of the status of the housing project and the proposal of a    settlement agreement to move the development forward to completion with a new completion date and a new date for calculating the LAD. The property was completed and delivered to the respondents within the extended time. (paras 24 & 30)

      (4)     In the event vacant possession was not delivered by the new completion date, the respondents would have been at liberty to sue on the basis of the original LAD provision. It was not a situation where the purpose of the housing legislation being to protect the weak against the strong was ousted. In terms of policy, there should be nothing illegal in law for a settlement agreement to be negotiated with the full participation and direction from JPN. It was done with a view to save a failing housing project from being an abandoned project. Further, it would be in the public interest and in the interest of house buyers if the law allowed a regulated settlement and waiver of the LAD on terms as specified in the settlement agreement. As such, it was not right and proper for the respondents, despite their promise to conditionally waive the LAD under the SPA, to resile from their promise and sue for late delivery under the SPA as if the settlement agreement did not exist. (para 30).”

      23.2. The High Court in Pinpoint Consortium (M) Sdn Bhd v Mammoth Empire Land Sdn Bhd [2019] 1 LNS 766 held that housing developers and buyers may enter into settlement agreements to settle any dispute arising from the SPAs concerning housing accommodation, based on, inter alia the following grounds:

      (a)  Housing developers and home buyers have the freedom of contract to enter into settlement agreements regarding housing accommodation and such freedom can only be restricted or abrogated by clear words of written law;

      (b)  Settlement agreements are valid under Section 64 of Contracts Act, 1950. There is nothing in HDA and HDR which invalidates a settlement agreement concluded under Section 64 of the Contracts Act, 1950. Nor is there any provision in the HDA and HDR which requires the Controller to approve or consent to the settlement agreement before the settlement agreement can take effect.

      (c)  Further, with effect from 01.12.2002, by way of the Housing Developers (Control and Licensing) (Amendment) Act, 2002, A1142 (“A1142”), Parliament has introduced, among others, a new Part VI (ss. 16A to 16 AI) regarding “Tribunal for homebuyers Claims”. Section 16T (1), (2), (3) and 16AB(a) HDA provide  specifically for settlement agreements between housing developers and homebuyers. If the Tribunal can record settlement agreements under Section 16(T)(3) and 16AB(a) HDA, settlement agreements cannot be invalid under HDA or HDR;

      (d)  There is a rebuttable statutory presumption that Parliament is deemed to know existing law - please see Gopal Sri Ram JCA’s (as he then was) judgment in the Court of Appeal case of Luggage Distributors (M) Sdn Bhd v. Tan Hor Teng & Anor [1995] 1 MLJ 719, at 754. When the legislature passed HDA (in 1966) and subsequent amendments to HDA (Subsequent Amendments), the legislature is deemed to know about the existing s. 64 CA. If Parliament had intended HDA to override s. 64 CA regarding settlement agreements, Parliament would have expressly done so when Parliament passed HDA and Subsequent Amendments. Parliament however did not do so. On the contrary, Parliament has passed A1142 which provides for the Tribunal to assist in the negotiation of a settlement agreement and to record such an agreement. It is therefore clear that the legislature has not intended for HDA to invalidate settlement agreements between housing developers and home buyers;

      (e)  In the Court of Appeal case of Oxbridge Height Sdn Bhd v. Abdul Razak Mohd Yusof & Anor [2015] 2 CLJ 252, at [23]-[25] and [30], Mohamad Ariff Yusof JCA recognized the validity of a settlement agreement between a housing developer and home buyer as follows:

      “[23]  In our view, the substance of the appeal turned on the validity of the settlement agreement. It seemed to us obvious on the evidence that the respondents (especially the first respondent) had expressly agreed to waive the LAD claimable under the SPA. It could not be said this waiver was a mere suggestion. Why would the respondents execute the settlement agreement except to agree to waive the earlier LAD and to accept the new completion date? …

      [24]   On the law, the signing of the settlement agreement would fall within the terms of s. 64 [CA] which deals with the “dispensation” of a promise made to a promisee: …

      [25]     The appellant’s claim could only be defeated if the settlement agreement was illegal and flouted s. 24 [CA], as either an agreement forbidden by law, or of such a nature as would defeat any law, or would be opposed to public policy. In this appeal, the respondents took a firm view on the effect of the [HDA] and reg. 11(1) [HDR], in effect arguing that the LAD provision in the Schedule G standard form SPA could not be contracted out. …

      [30]    …In terms of policy, there should be nothing illegal in law for a Settlement Agreement to be negotiated with the full participation and direction from JPN with a view to save a failing housing project from being an abandoned project. It will be in the public interest, and in the interest of house buyers, if the law allowed  a regulated settlement and waiver of LAD on terms as specified in the settlement agreement which was the subject matter of this appeal. It was therefore not right and proper for the respondents, despite their promise to conditionally waive LAD under the SPA, to resile from their promise and sue for late delivery under the SPA as if the settlement agreement did not exist.” (emphasis added).

      (f)  It is in the public interest for the law to recognize the validity of settlement agreements. Through amicable settlements, all disputes regarding SPAs of housing accommodation may be finally, expeditiously and economically disposed. Needless to say, if disputes regarding SPAs of housing accommodation are amicably  resolved by way of settlement agreements, the courts will not be burdened with these disputes.

      23.3. In this regard, Developers must ensure Purchasers expressly, truly and indisputably agree to the extension of time to deliver vacant possession and to waive their claims for LAD under the SPA until the expiry of the new completion date. (Hedgeford Sdn Bhd v. Sri Ganatha a/l Sivanathan & Ors [2018] 1 LNS 1497).

F.   Conclusion

24. In light of the above, the assistance from the Minister or alternatively, the Purchasers’ agreement to extend time to deliver vacant possession with a waiver of their claims for LAD as stated in paragraphs 22 and 23 above appear to be the only options available to the Developers under the HDA 1966 to secure an extension of time to deliver vacant possession. However, they are subject to the Ministry’s written direction to allow and/or the agreement from the Purchasers of all units of the property to agree to the extension of time requested by the Developers respectively.

25. The discussion above is only applicable to Housing Development projects where the SPA is a form of statutory contract prescribed under Section 24 of the HDA 1966 and/or Schedule G & Schedule H of the HDR 1989. Parties in ordinary SPAs who have freedom to make provisions between themselves ought to revisit the terms and conditions of their contract to determine if it is possible to seek an extension of time or to invoke a force majeure clause to suspend or relieve themselves from their obligations for the time being.

 

The contents of this article are not intended to constitute legal advice on any specific matter and should not be relied upon as a substitute for specific legal advice on matters or transactions.

For further information, please contact the author of this article.