Introduction

The proposed Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Bill 2020 (“2020 Coronavirus Bill”) has been tabled in Parliament for first reading. Of the many proposals contained in the 2020 Coronavirus Bill, the pertinent clause that modifies the Housing Development (Control and Licensing) Act 1966 (“HDA 1966”) is Clause 2 of the 2020 Coronavirus Bill

The modifications vis-a vis the HDA 1966 is specified under Part XI of the 2020 Coronavirus Bill.

Modifications to the HDA 1966

It is to be noted that despite the fact that the 2020 Coronavirus Bill is only expected to be passed by Parliament sometime later this month, Clause 32 of the 2020 Coronavirus Bill, expressly states that the modifications to the HDA 1966 comes into operation from 18.03.2020.

Clause 33 of the 2020 Coronavirus Bill then states that only Schedule G, H, I and J Housing Development (Control and Licensing) Regulations 1989 Sales & Purchase Agreements executed prior to 18.03.2020 shall be entitled to the protection as afforded by the 2020 Coronavirus Bill.

Clause 34 of the 2020 Coronavirus Bill stipulates that developers shall not impose any late payment charges where a purchaser fails to make installment payments between 18.03.2020 and 31.08.2020. The purchaser may apply for an extension of that period, wherein the Minister may then extend it further up until 31.12.2020.

Clause 35 of the 2020 Coronavirus Bill then proposes the much needed relief and moratorium for the Developer against claims by the purchaser for Liquidated Ascertained Damages (“LAD”) between 18.03.2020 and 31.08.2020, with a possible extension sought by the Developer for further moratorium up until 31.12.2020.

The same Clause 35 then protects the Purchaser from being unreasonably penalized by the Developer for failing to take Vacant Possession (“VP”) of their parcel(s) / properties between 18.03.2020 and 31.08.2020 or any extended period up until 31.12.2020 by the Minister. In short there can be no deeming provision used against the purchaser.

Clause 36 of the 2020 Coronavirus Bill excludes the calculation for the defect liability period and the time period for the Developer to make good the defects between 18.3.2020 and 31.8.2020 with a possible extension up until 31.12.2020 by the Minister on the application of the Purchaser.

Clause 37 of the 2020 Coronavirus Bill is paramount. It excludes the modifications in clauses 34 to 36 for legal proceedings commenced and judgments or awards obtained in relation to late payment charges payable by the purchaser and liquidated damages payable by the developer from 18.03.2020 until the publication of this Bill as an Act of Parliament.

The same Clause 37 states any late payment charges paid by the purchaser and liquidated damages paid by the developer before the publication of this Bill as an Act of Parliament shall be valid and not subjected to any refund.

Clause 38 of the 2020 Coronavirus Bill extends the jurisdiction of the Tribunal for Homebuyer Claims whereby if the limitation period to file a claim under Section 16N(2) of the HDA 1966 has lapsed between 18.03.2020 until 09.06.2020, the homebuyer can file the action until 31.12.2020. The limited period under Section 16N(2) of the HDA 1966 is twelve months from the date as follows:-

1. The issuance of certificate of completion and compliance (“CCC”);
2. Expiry of defect liability period; or
3. Termination of Sale and Purchase Agreement before the issuance of CCC.

Conclusion

The 2020 Coronavirus Bill is undoubtedly much awaited but long overdue bearing in mind that it has been about five (5) months since the unprecedented COVID-19 was declared a Pandemic by the World Health Organization (“WHO”) and the imposition of the Movement Control Order by (“MCO”).

The 2020 Coronavirus Bill does indeed address the crucial concerns of both the Developer and the Purchaser by affording the Moratorium / Reliefs. Looking at the perspective of the Developer, the concerns of not being saddled with colossal LAD claims will be of pressing urgency to ensure their continued existence in completing the housing development as contracted.

Colossal LAD claims against the Developer due to the delay in completion of the housing development due to the COVID-19 Pandemic, coupled with the hardship of mobilization of workers and procuring the supplies will only result in the Developer going into Liquidation which will be self-defeating to the purchaser.

Looking at the perspective of the purchaser, the 2020 Coronavirus Bill does extend the limitation period to file legal proceedings in the Tribunal for Homebuyer Claims against the developer till year end if such limitation period lapsed between 18.03.2020 and 09.06.2020.

The current economic climate and the sentiments of the construction industry do warrant the Moratorium / Reliefs up until the year end. The 2020 Coronavirus Bill is indeed welcomed.