James has signed a sale and purchase agreement (“SPA”) in the prescribed form of Schedule H under Housing Development (Control and Licensing) Act 1966 (“HDA”) with the Developer, ABC Sdn Bhd for the purchase of a unit of condominium in 2010. Nevertheless, the Developer has not delivered the vacant possession of the unit until to date.
Therefore, he wishes to terminate the SPA and demand the Developer to refund all the payment made. Can he proceed so?
A purchaser shall only be entitled to terminate SPA in accordance with section 8A of the HDA, whereby it is provided that the purchasers may apply to the Minister for approval to terminate all the sale and purchase agreements entered into in respect of a housing development and seek for refund only if-
- such application is received by the Minister within 6 months after the execution of the first SPA in respect of that housing development or that phase of housing development; and
- at least 75% of all the purchasers who have entered into the sale and purchase agreements have agreed with the housing developer in writing to terminate the sale and purchase agreements.
As such, James is unable to terminate the SPA without the Ministry of Urban Wellbeing, Housing and Local Government’s approval. Alternatively, James can always report this matter to the Ministry for assistances.
Section 8A of the HDA has been recently amended, via HDA (Amendment) Act 2012, whereby a purchaser shall be entitled to terminate the SPA entered into in respect of a housing development if-
- the licensed housing developer refuses to carry out or delays or suspends or ceases work for a continuous period of 6 months or more after the execution of the SPA;
- the purchaser has obtained the written consent from the end financier; and
- the Controller of housing has certified that the licensed housing developer has refused to carry out or delayed or suspended or ceased work for a continuous period of 6 months or more after the execution of the SPA.
In such event, the licensed housing developer shall within 30 days of termination refund or cause to be refunded to such purchaser all monies received by the licensed housing developer from the purchaser free of any interest.
Nevertheless, the above new amendment shall only be applicable to SPA entered after the date of coming into operation of the HDA (Amendment) Act 2012. As of to-date, 24 June 2014, the said Amendment Act has not come into force.
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