Yew Huoi, How & Associates | Leading Malaysia Law Firm

Real Estate Sue Developer

PROPOSED TEMPORARY MEASURES BILL BARRING HOUSEBUYERS TO SUE DEVELOPER

The Covid-19 pandemic has wreaked havoc to business operations in the world. Performance of contracts in Malaysia is disrupted as the Movement Control Order (“MCO”) restricts performance of unessential services and production of unessential goods.

PROPOSED TEMPORARY MEASURES BILL BARRING HOUSEBUYERS TO SUE DEVELOPER
While the announcement provides relief to developers, however, the delay of Parliamentary seating in Malaysia which is the sequel of the Sheraton Move will leave many to wonder when will this bill be passed

One of such industries affected relates to construction and property development. We have in our previous legal updates set out that the Covid-19 epidemic does not relieve the developer’s duty to complete construction of building within the stipulated timeframe. This is because force majeure clause in a developer’s SPA (which has to comply with Schedule H or G of the Housing Development (Control & Licensing) Regulations 1989 (“HDR 1989”)) was previously held by our Federal Court to be void. Doctrine of frustration does not apply to developer’s SPA under HDR 1989. In another words, if developer is not relieved from the lost time brought about by the MCO, it is likely developer will not complete the construction of a project on time. Buyers can then bring action for liquidated ascertained damages (LAD) under the SPA against developer.

That said, developer has finally seen light at the end of the tunnel by the recent announcement by our Housing and Local Government Minister Zuraida Kamarudin on 27.6.2020. It was announced that a new Temporary Measures Bill will be tabled in the next Parliamentary seating. It was also announced that the Temporary Measures Bill will essentially disallow both developers and buyers from suing one another for delay caused by MCO.

While the announcement provides relief to developers, however, the delay of Parliamentary seating in Malaysia which is the sequel of the Sheraton Move will leave many to wonder when will this bill be passed. Politics aside, legislating matters relating to performance of contract during MCO is crucial as it will provide the industry the much-needed clarity and certainty in law. Companies and businesses need to be able to factor in potential losses from the events arising from MCO into their accounts and make provision accordingly. We will strong urge all parties stop the political bickering and do what is needed to be done for businesses and economy first.

©2020. YEW HUOI, HOW & ASSOCIATES. ALL RIGHTS RESERVED. The contents of this legal updates are intended for general information only and should not be construed as legal advice or legal opinion. If you need further advice or explanation on the subject, please contact our firm. Please do not reproduce, transmit or distribute the contents therein in any form, or by any means as Legal Profession (Publicity) Rules 2001 restrict such circulation.

Recent Post

NAVIGATION AND SHIPPING LAW – COLLISION REGULATIONS – COLLISION AT SEA – A WAKE-UP CALL FOR ADHERING TO NAVIGATION RULES

The collision between the FMG Sydney and MSC Apollo highlights the critical importance of adhering to established navigation rules. Deviations, delayed actions, and reliance on radio communications instead of clear, early maneuvers can lead to disastrous outcomes. This case serves as a stark reminder for mariners: follow the rules, act decisively, and prioritize safety above assumptions.

Read More »

SHIPPING AND ADMIRALTY IN REM – A SINKING ASSET – COURT ORDERS SALE OF ARRESTED VESSEL TO PRESERVE CLAIM SECURITY

In a landmark admiralty decision, the High Court ordered the pendente lite sale of the arrested vessel Shi Pu 1, emphasizing the principle of preserving claim security over the defendant’s financial incapacity. The court ruled that the vessel, deemed a “wasting asset,” could not remain under arrest indefinitely without proper maintenance or security. This case reinforces the necessity for shipowners to manage arrested assets proactively to prevent significant financial and legal repercussions.

Read More »

EMPLOYMENT LAW – IS DIRECTOR A DIRECTOR OR EMPLOYEE? UNPACKING DUAL ROLES IN EMPLOYMENT LAW

The Court of Appeal clarified the dual roles of directors as both shareholders and employees, affirming that executive directors can qualify as “workmen” under the Industrial Relations Act 1967. The decision emphasizes that removal as a director does not equate to lawful dismissal as an employee unless due process is followed. This case highlights the importance of distinguishing shareholder rights from employment protections, ensuring companies navigate such disputes with clarity and fairness.

Read More »

REGULATIONS – GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT 1947 ) – ARTICLE I

This legal update explores key provisions of the General Agreement on Tariffs and Trade (GATT 1947), focusing on Article I (Most-Favoured-Nation Treatment), Article II (Schedules of Concessions), Article XX (General Exceptions), and Article XXI (Security Exceptions). Article I mandates that any trade advantage granted by one contracting party to another must be extended unconditionally to all other parties. Article II ensures that imported goods from contracting parties receive treatment no less favourable than that outlined in agreed schedules, while also regulating permissible taxes and charges. Articles XX and XXI provide exceptions for measures necessary to protect public morals, health, security interests, and compliance with domestic laws. The provisions reflect the foundational principles of non-discrimination, transparency, and fair trade, while allowing for limited, well-defined exceptions. This summary is intended to provide a concise reference for businesses and legal practitioners involved in international trade law.

Read More »
en_USEN
× Contact Us