The Homebuyer’s Tribunal (formally, Tribunal for Homebuyers Claims, and in Malay, Tribunal Tuntutan Pembeli Rumah) provides an avenue for purchasers of residential properties to initiate claims against housing developers. The Tribunal is established under the Housing Development (Control & Licensing) Act 1966 (“HDA”).
A claim at the Homebuyer’s Tribunal is a cost-effective alternative to court proceedings. This article will explore the requirements for filing a claim, the types of claims that can be filed, the remedies the Tribunal can award, challenging an award, and the pros and cons of bringing a claim to the Tribunal.
Requirements
To bring a claim at the Tribunal, the following criteria must be satisfied:
- The individual making the claim is a homebuyer. Under the HDA, “homebuyer” is defined as a purchaser, and includes a person who has subsequently purchased a housing accommodation from the first purchaser;
- The property is situated in Peninsular Malaysia;
- The property is a housing accommodation;
- The claim must not exceed RM50,000 (unless otherwise agreed by the home buyers/purchasers with the property developer); and
- The claim is brought no later than 12 months from:
a) For claims for liquidated ascertained damages (“LAD”) or other claims arising from the sale and purchase agreement (“SPA”), the date of the issuance of the Certificate of Completion and Compliance (“CCC”) for the housing accommodation or the common facilities;
b) For claims relating to defects, the expiry date of the defect liability period as set out in the SPA [under the HDA, the defect liability period is 24 months from the date of receipt of vacant possession]; or
c) For all other claims in relation to the SPA which were terminated before the issuance of CCC, the date of termination of the SPA by either party.
If the claim is not brought within the applicable period provided, it can no longer be brought at the Tribunal. The only remaining option would be to commence legal proceedings in court, which has a longer limitation period of 6 years for an action for breach of contract.
The HDA and Homebuyer’s Tribunal do not limit the jurisdiction of the courts. A homebuyer can still choose to initiate a claim in court, even if the claim amount is less than RM50,000.
Defects During DLP
The defect liability period (“DLP”) is a specific timeframe – typically 24 months from the date of vacant possession – during which the property developer is contractually obliged to repair defects in the property. This period is commonly stipulated in the SPA.
If any defects are discovered during the DLP, the homebuyer may contact the property developer or the building’s management office to clarify the relevant procedures for notifying such defects. In most cases, the homebuyer will be required to complete and submit a defects notification form to either party within the DLP timeframe.
The standard Schedule G or Schedule H contracts, required by the HDA, provide that once the defect notification form is submitted, the housing developer will have 30 days to carry out the necessary repairs to the defects.
In cases where the developer does not repair or make good the defects specified in the defect notification form, the homebuyer is entitled to carry out the repair works or hire a contractor to do so. The homebuyer must first give the developer 14 days’ notice informing them of the intention to rectify the defects and the costs to carry out the repairs. Thereafter, the homebuyer can issue a written demand to the housing developer’s solicitors to claim the costs of the rectification. The housing developer’s solicitors must, within 14 days, release the rectification costs from the stakeholder sum held by the housing developer’s solicitors within 14 days from receipt of the written demand from the homebuyer.
Types of Claim
There are two kinds of claims that a homebuyer can bring to the Tribunal, which can be categorised into technical claims and non-technical claims.
Technical claims are claims for damages suffered arising from the housing developers’ failure to comply with specifications, poor workmanship, omission of work, defects, shrinkage or other faults to the building and/or property or incomplete or non-availability of common facilities. Common examples of technical claims are damages suffered due to leakage, unsafe wiring, loose floorboards or tiles, misaligned doors or unusable fixtures (this list is not exhaustive).
Non-technical claims include claims for LAD (commonly known as compensation for late delivery) for the late delivery of property and common facilities, and a refund of deposits paid.
The Tribunal is not able to determine claims of the following nature:
- Claims for the recovery of land or any estate or interest in land;
- Claims for abandoned projects;
- If the dispute concerns:
a) The entitlement of any person under a will, settlement or intestacy;
b) Goodwill; or
c) Any trade secret or intellectual property right, such as copyrights, trademarks, etc.
These claims, which fall outside the jurisdiction of the Homebuyer’s Tribunal, will have to be pursued in the civil courts.
Procedure
A homebuyer can start a claim at the Homebuyer’s Tribunal by filing Form 1 at the Tribunal office at the Ministry of Housing and Local Government. The Tribunal will then seal and sign Form 1, and the homebuyer will have to serve the sealed and signed Form 1 on the opposing party, i.e. the housing developer.
Thereafter, the housing developer will repeat the process with Form 2, which will be served on the homebuyer. The homebuyer will have one chance to reply with Form 3, which will have to be filed with the Tribunal, which will seal and sign Form 3. The sealed Form 3 will have to be served on the housing developer.
More information and the relevant forms can be found on the Ministry of Housing and Local Government’s website here.
Both the homebuyer and the housing developer will be notified of a hearing date, and both parties’ attendance at the hearing is mandatory. Parties are usually not allowed to be represented by lawyers during the tribunal proceedings, except for cases which involve complex issues of law. In the event legal representation is allowed for one party, the other party will also be entitled to legal representation. At the conclusion of the hearing, the President of the Tribunal will hand down an award.
Award
An award is the Tribunal’s final decision on claims filed by homebuyers. The maximum award that can be given by the Homebuyer’s Tribunal is RM50,000. Examples of awards which the Tribunal can make are as follows:
- An order for one party to pay money to the other;
- A refund of monies already paid by the homebuyer;
- An order for a party to comply with the terms of the Sale and Purchase Agreement (SPA);
- Compensation for loss or damage suffered by the homebuyer;
- Variation or setting aside of the contract;
- Payment of costs and/or interest to any party; or
- Dismissal of the claim.
The award is as effective and binding as if it were a court judgment. The Homebuyer’s Tribunal has to make its award within 60 days from the date of the first hearing.
A failure to comply with the award is a criminal offence under Section 16AD of the HDA, and if convicted, the party required to comply with the award can be fined and/or imprisoned. Should the housing developer refuse or fail to comply with the award after it is made, the homebuyer can report the non-compliance with the award to the National Housing Department to prosecute the non-compliance.
The civil enforcement of an award can be done by enforcement proceedings in court, such as filing a judgment debtor summons or garnishee proceedings. The homebuyer may also commence winding-up proceedings. At this stage, it would be prudent for the homebuyer to appoint a lawyer for legal advice and act on their behalf.
Challenging a Tribunal Award
Either party who is dissatisfied with a Tribunal’s decision may challenge it through a process known as judicial review at the High Court. It is important to understand that the High Court does not operate as a standard appeal; it will not re-evaluate the facts of the case to reach a new conclusion. As clarified in Hedgeford Sdn Bhd v Lynda Quah May Lu & Anor [2019] MLJU 364, the court only overturns a tribunal’s award if the decision-making process was flawed, or if the Tribunal misinterpreted the law, or failed to follow the rules of natural justice, or reached a conclusion that is clearly contradicted by the evidence.
To initiate this challenge, “leave” (permission) must be applied for and obtained from the High Court to pursue the judicial review. This application is time-sensitive and must be filed within 90 days from the date the award was issued or communicated. While many Tribunals are designed for self-representation, judicial review is a formal and technical legal procedure. Legal representation in judicial review proceedings is strongly recommended.
Pros and Cons
The advantage of bringing a claim to the Homebuyer’s Tribunal is that it is cost-effective, as the homebuyer does not need to be legally represented. Although lawyers are not allowed to represent the homebuyers in the Tribunal, homebuyers can nevertheless still seek the advice of lawyers if their claim is complicated. The filing fee for the documents at the Tribunal is only RM10. The Tribunal is also much faster than court proceedings.
However, the disadvantage of bringing a claim at the Homebuyer’s Tribunal is that the claim must be brought within 12 months. Tribunal claims are also limited to RM50,000. Finally, complex claims may end up in court anyway, if the unsuccessful party challenges the award by way of judicial review.
Conclusion
The Homebuyer’s Tribunal offers an affordable and efficient platform for resolving disputes with housing developers. While it has certain limitations, it remains a meaningful alternative to court proceedings, especially for straightforward claims. While designed for self-representation, seeking professional legal advice is highly recommended for complex claims, award enforcement, or when considering a challenge via judicial review to fully safeguard your rights and interests.
By Michael Koh and Rachel Ng
Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.
