SINCE August 2020, the National House Buyers Association (HBA) has been involved in a series of consultations with the Ministry of Housing and Local Government (KPKT). We wonder whether the current minister, Nga Kor Ming, has been adequately briefed on the draft proposals and amendments to the Housing Development (Control & Licensing) Act 1966 and Housing Development Regulations to understand their ramifications and implications for the industry and house buyers.

One ludicrous proposal is to increase the monetary jurisdiction of the tribunal from RM50,000 to RM250,000 – which is a hefty five-fold increase. Remember that the Housing Tribunal was set up to be a fast, cheap and simple avenue for house buyers to seek redress of up to RM50,000. But it won’t be so simple to claim for liquidated ascertained damages from your housing developer if the limit is increased to RM250,000.

Section 16M of the Act states that “the Tribunal shall have the jurisdiction to determine a claim … where the total amount for which an award is sought does not exceed RM50,000”.

Ill-advised or unadvised

The ministry thinks that it is doing aggrieved house buyers a favour by increasing the tribunal’s monetary jurisdiction to RM250,000. But the ministry could not give HBA a logical explanation except to state that:

• It was the proposal of then Housing Minister Datuk Hajjah Zuridah Kamaruddin;
• The higher limit will correspond with the increase in the Consumer Tribunal from RM25,000 to RM50,000; and
• The increase is in line with the monetary jurisdiction of the Strata Management Tribunal, which is RM250,000.

HBA objections and rationale

HBA cannot fathom the motives of such a move. The proposed increase comes with potential drawbacks and repercussions. Below is HBA’s rationale for retaining the existing claim limit:

• Tribunal decisions are subject to judicial review. With the higher limit of RM250,000, there is more reason for housing developers to file for a judicial review rather than settle or obey the award;
• Since lawyers are not permitted at tribunal proceedings, it is prejudicial to the weaker party (house buyers) to proceed with large claims. Without legal aid, homebuyers will be unsure of their rights and entitlement;
• Any testimony at a tribunal will be recorded and used as evidence if the case is brought before the High Court for judicial review; 
• The trend today is for developers to employ in-house lawyers or law degree holders to represent them at the tribunal and argue with case laws, authorities and expert witnesses. Those witnesses could be their own architects, engineers, land surveyors, building inspectors, water leakage experts, and others. It will be a case of David vs Goliath. Can aggrieved buyers defend themselves effectively?
• It defeats the purpose of having a tribunal if lawyers are allowed in. Affected house buyers – the victims – might as well file their cases in the law courts;
• Large claims will open the floodgates to judicial review by the developers’ battalion of lawyers while house buyers have to bear the legal expenses on their own. Who is in control of the game? Obviously, the developers.
• The increase to RM250,000 is misleading. It gives the house buyer false hope. The housing ministry is doing a disservice to naive and innocent house buyers; and
• The higher the stake, the higher the possibility of developers dragging cases to the apex court. They would want to delay cases for obvious reasons.

SMT deals with big-ticket items

If the minister aspires to increase the jurisdiction limit of the Housing Tribunal to that of the Strata Management Tribunal (SMT), then the minister has been ill-advised for the following reasons:

• The SMT is not restricted to housing issues. It also deals with “commercial schemes” like mixed developments, strata shops, shopping malls, office complexes, and strata factories;
• Claims before the SMT include common property or facilities, and common funds of all owners or proprietors;
• The claims also include big-ticket items involving sinkage of the common roof, cracks in the facade, defects and repair costs to the swimming pool, faulty passenger lifts, defective sauna and steam facilities, cooling tower, and plumbing issues;
• The claimants, apart from individuals, are the management bodies –  Joint Management Body, Management Corporation and Subsidiary Management Corporation – property developers, proprietors, managing agents and other stakeholders.

Magistrate’s court jurisdiction

If the minister feels that the Housing Tribunal quantum should be higher, the increase should not exceed RM100,000 which is the monetary jurisdiction of the magistrate’s court.

After all, the tribunal’s award, in the event of non-compliance under Section 16AD, is registered at the magistrate’s court for execution processes and prosecution purposes.

Please consider the bigger picture before making any proposal. The minister has to take into account the possible actions of developers, who are profit-driven, as well as the house buyer who trusts the government to do the right thing.

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