In brief
The Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID 19) Amendment Bill 2021 was enacted by the Dewan Rakyat of Parliament on December16,2021. The bill was referred to as the Covid 19 Amendment Bill.
What is the new context in Covid 19 Amendment Bill?
- Part XIA
- The Covid-19 Amendment Bill adds a new Part XIA to the home development laws, which makes significant charges. We like to discuss the six major adjustments that will have an impact on housing developers and buyers.
a. Agreement and First Agreement
- As can be seen in Schedule G, H, I and J, the term ‘agreement’ basically means sale and purchase agreement under the Housing Development (Control and Licensing) Regulations 1989.
- However, the terms of ‘first agreement’ only applies between the first buyer of the property and the developer but this does not apply to the subsequent purchasers, therefore they will not enjoy the relief measures.
b. Late payment charges- Developers cannot charge
- The developer shall not impose any late payment costs for unpaid instalments between 1 January 2021 and 31 December 2021, according to Clause 38B in the bill. The waiver of late payment penalties is only valid for the first agreement signed before May 31, 2021.
Q. I bought a house from developer A and failed to pay the monthly payments for the months of June to September during MCO. Is it possible for developer A to charge me late fees for the three months of unpaid instalments?
A. No, if the purchaser failed to pay any instalment under the schedule of payment for the period from 1 January 2021 – 31 December 2021, the developer cannot impose any late payment charges in respect of such unpaid instalments. However, subsequent purchasers will not enjoy these benefits.
c. Developer can apply for extension of delivery of vacant possession
- Clause 38C of the Bill states that the developer may apply to the Minister for an exemption from the calculation of late delivery of vacant possession or completion of common facilities for any period between January 1, 2021 and December 31, 2021 if the Minister is satisfied that the inability was caused by the COVID-19 control or prevention measures specified, made, or taken under Act 342
Q. What if you bought a house from developer A and they failed to deliver the vacant possession and incomplete common facilities for the household? Are they liable to pay the penalties for failing to deliver vacant possession and incompletion of common facilities?
A. No, if the developer fails to complete everything by the time given, they are exempted from the calculation of late delivery of vacant possession or completion of common facilities for any period between 1 January,2021 till 31 December, 2021 only if the minister is satisfied that the inability was caused by the COVID-19 control or prevention measures specified, made, or taken under Act 342
d. Taking of Vacant Possession
- Section 38D of the Bill states that if the purchaser is unable to take vacant possession during the period 1 June 2021 to 31 October 2021 or any other time not covered by clause 38C above, the purchaser is not deemed to have taken vacant possession. During the full lockdown in 2021, the mobility control limitations were in effect from June 1 to October 31, 2021.
Q. What if you have bought a house from developer A and you have to move in by the given timeframe from the developer, however you are unable to do so. Does that mean that you have taken vacant possession of the property?
A. No, the purchaser is not regarded to have taken vacant possession if he or she is unable to do so during the period 1 June 2021 to 31 October 2021, or any other time not covered by clause 38C above.
e. Exclusion of calculation of defect liability period
- The period from 1 June 2021 to 31 October 2021 shall also be excluded from the calculation of the defect liability term, according to Clause 38E of the Bill.
Q. I have taken vacant possession of my new house on 2.5.2020, when is my defect liability period ends?
A. Assuming your defect liability term is 24 months and you shall have another extra 4 months and 30 days under the Covid-19 act.
f. Saving
- The bills stated that any legal procedures begun, or any judgement or award obtained, to recover late payment charges owed by the purchaser or liquidated damages would be unaffected by the revisions in section 38B, 38C, 38D, and 38E.
2) On the other hand, the new Covid-19 Amendment Bills 2021 have also added two new sections which are;
- Section 40A states that under the Industry Relations Act of 1967, the period from 1 June 2021 to 31 December 2021 will be omitted from the calculation of the period for according recognition, making a report and filing of representation and;
- Section 40B held that under the Industrial Relations Act 1967, any employer, trade union of employers, trade union of workers, or worker who is in a place subject to an enhanced movement control order is excluded from the calculation of the period.
3) Part XIIIA and XIIIB
a. XIIIA (Modifications to the Sabah Labour Ordinance)
- Section 42B, which allows employees to file a complaint under paragraph 7A(3), has been extended from June 1, 2021, to the expiration date of this Act, but not beyond December 31, 2022. Section 42C, on the other hand, states that an employee who is in a location subject to an enhanced movement restriction order is exempt from the calculation of the time limit for filing a complaint under paragraph 7A(3).
b. XIIIB (Modifications to the Sarawak Labour Ordinance)
- Section 42E stated that the period from May 29, 2021 to October 31, 2021 should be excluded from the calculation of the period for filing a complaint under paragraph 8A(3), whereas Section 42(F) refers to employees who are subject to an enhanced movement control order.