LAST week, I compared the difference between a court judgement and an award by a Housing Tribunal. I brought up a case in which a house-buyer filed for liquidated damages of RM40,000 from the developer, and had it granted by the tribunal.
With the award registered at the relevant civil court, the work or function of theHousing Tribunal comes to an end. Should the developer fail to make the payment awarded by the tribunal, the house-buyer would then have to seek redress with the civil court.
However, if the developer resorts to delaying tactics and the buyer faces legal fees he can’t afford, then there’s a very real chance that he will never get any money from the developer.
“But, wait ... didn’t the Housing Tribunal president say it’s an offence not to comply with the tribunal’s order? Didn’t the president say I could lodge a complaint with the Housing Ministry? Surely, there is still hope?” the house-buyer thinks.
I think credit must be given to the Housing Tribunal for the speedy resolution of disputes and the granting of awards. However, the tribunal’s effectiveness in resolving house-buyers’ problem will continue to remain highly doubtful until developers are made to be “award-compliant”.
That is to say, all developers must be made to pay as ordered by the Housing Tribunal without the case having to be dragged to the civil court.
As we have discussed before, failure to comply with a Housing Tribunal award is an offence punishable by a fine of up to RM10,000 and/or imprisonment of up to two years. Therefore, in addition to being enforceable in the civil courts, a Housing Tribunal award, unlike a civil court judgement, may entail criminal sanction.
A housing developer and (by virtue of section 22(1) of the HDA) the directors, managers and secretaries, as well as agents, clerks or servants of the housing developer can be sent to prison if the developer does not pay as ordered by theHousing Tribunal. They can be imprisoned between a year and three years and to a fine of between RM50,000 and RM250,000.
Prosecution, however, lies in the hands of the Public Prosecutor, not the Housing Tribunal, and despite a few thousands awards not having been complied with over the years, the number of prosecution cases remains disgracefully negligible.
Enforcement
Shortly before the 2013 general election, I witnessed the presentation of letters of appointment to the presidents of the Housing Tribunal by the then honorable Housing Minister and heard him speak. In his speech, the minister acknowledged appreciatively the large number of awards made by the Housing Tribunal over the years, but also noted that thousands of awards remained engkar (not complied with).
He said more effective ways of ensuring compliance had to be looked into.
The question now, is prosecution not an effective means of ensuring compliance by defiant developers? Parliament must have thought so when it saw it fit in 2002 to allow for criminal sanction to be imposed on developers who defy the awards by the Housing Tribunal. After all, surely most, if not all, developers would rather pay up than be slapped with a hefty fine, or worse still, risk going to prison?
On top of that, a developer, once convicted, is liable to a fine of RM1,000 for each and every day that he fails to do the bidding of the Housing Tribunal (section 16AD(2) of the HDA). If that is not enough to make a non-compliant developer pay up immediately, I don’t know what would be.
It comes as no surprise that developers who have been prosecuted have been known to pay up immediately.
Unfortunately, developers have also been known to get away with rather insignificant fines. And sadly, cases of developers being hauled up and prosecuted remain far and few in between, despite the increasing number of offences being committed.
What’s noteworthy here is that developers do pay up when faced with prosecution. We can, therefore, conclude that effective prosecution is the only sure means to ensure compliance by stubborn developers. In fact, I dare say that severe sentences, such as imprisonment, in a few or even just a couple of prosecution cases, would serve as a very effective deterrence.
It is my hope, and I am sure the hope of many house-buyers out there, that the current honorable Housing Minister Datuk Abdul Rahman Dahalan, will during his term in office, ensure that there is a significant increase in prosecution regardingengkar awards.
Until this takes place, the effectiveness of the Housing Tribunal as a forum for house-buyers to fight against errant developers, and the efficacy of the Housing Ministry in protecting the rights of house-buyers, will remain doubtful.
Action against errant developers is seen by many as something to be desired.
Chang Kim Loong is the honorary secretary-general of the National House Buyers Association (HBA): www.hba.org.my, a non-profit, non-governmental organisation manned purely by volunteers. He is also an NGO councillor at the Subang Jaya Municipal Council. - The Star
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