What is Covid-19 Act 2020?
It is a written law to provide temporary measures in reducing the negative impacts of Covid-19 pandemic to individuals and companies.

When did Covid-19 Act 2020 come into force?
23 October 2020.

 What is in the Covid-19 Act 2020?


The Covid-19 Act extended time limitation to commence legal action. Any limitation period which expires from 18.3.2020 – 31.8.2020 shall be extended to 31.12.2020. For example:

Q: I have loaned RM10,000.00 to A on 2.8.2014. A refuses to return me the money. When is the last day I can sue A?

A: Before the commencement of the Covid-19 Act, the last day for you to sue A is on 1.8.2020 (6 years limitation period applies). However, you now have until 31.12.2020 to sue A.


The Covid-19 Act increases the threshold to commence bankruptcy petition from RM50,000.00 to RM100,000.00. For example:

Q: I owe the bank RM70,000.00. Can the bank file a bankruptcy petition against me?

A: No. Before the coming into force of the Covid-19 Act, if you owe the bank for more than RM50,000.00, the bank can do so. However, under the Covid-19 Act, the creditor can only file a bankruptcy petition if the amount of debt is more than RM100,000.00.


Q: I have a hire purchase agreement with Bank P. However, during the Movement Control Order (“MCO”), I have failed to pay more than 2 months of instalments. Can the bank take possession of my car?

A:   No. The bank cannot take possession of any goods i.e. your car for failure of payment of instalments for the period from 1.4.2020 – 30.9.2020.


If you have a credit sale agreement entered before 18.3.2020 and there are no overdue instalments before 18.3.2020, you have 3 options. The credit facility provider cannot sue you for the outstanding payment. For example:

Q: I have bought an iPhone 11 on 17.3.2020 via credit sale agreement with Maxis. During MCO, I have failed to pay 2 months of instalments. What are my options?

A:   If Maxis issue you notice of overdue payment, you can choose to either pay the overdue instalments, pay off the entire credit sale agreement or return your iPhone 11 to Maxis. Maxis is also not allowed to commence legal action to recover the outstanding amount from you.

  1. DISTRESS ACT 1951

Q: I have rented a room in Condominium Y. During MCO, I have failed to pay my rental for the period from April – July 2020. Can my landlord get a warrant of distress and seize my goods and sell them off for the purpose of recovering the rental?

A: No. If the tenant is unable to pay rental for the period from 18.3.2020 – 31.8.2020, the landlord is not allowed to seize the tenant’s goods and sell them to recover the arrears under the Distress Act 1951.


(i) Late payment charges

Q:   I have bought a house from developer Y. During MCO, I have failed to pay instalments for the period from April – June 2020 to developer Y. Can developer Y impose late payment charges on me for the 3 months of unpaid instalments?

A:   No. If the purchaser failed to pay any instalment under the schedule of payment for the period from 18.3.2020 – 31.8.2020, the developer cannot impose any late payment charges in respect of such unpaid instalments. You may apply for extension of this period until 31.12.2020.

(ii)    Delivery of vacant possession (“VP”) and liquidated damages (“LAD”)

Q: I have bought a house from developer Z. The expected date for the delivery of VP is on 1.6.2020. However, developer Z has failed to deliver the VP on 1.6.2020 and deliver the VP on 15.8.2020. Can I claim LAD from developer Z for late of delivery of VP?

A: No. The period from 18.3.2020 – 31.8.2020 shall be excluded from the calculation of the LAD.

(iii)   Defect liability period (“DLP”)

The period from 18.3.2020 – 31.8.2020 shall be excluded from the calculation of DLP.

Q:   I have taken VP of my new house on 1.5.2019, when is my DLP ending?

A:   Assuming your DLP is 24 months and you shall have another extra 5 months and 13 days under the Covid-19 Act, it should end on 13.10.2021. However, you may even apply to the Minister for extension of another extra 4 months. In such event, your DLP will then end on 12.2.2022


Q:   My boss has fired me on 31.5.2020. When is the last day for me to file a representation to the Industrial Relation Department?

A:    You have 60 days to file a representation. However, the period from 18.3.2020 – 9.6.2020 will not be counted in the 60 days period.

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