Scenario A: You want to file your claim at the Housing Tribunal? Aiyah, better not lah, waste of time only. My friend filed his claim two years ago. Until now, still cannot get his money. You better go to court.
Scenario B: But very expensive if go to court. The lawyer says my case must go to the magistrates’ court, and you know how much he wants to charge? RM5,000! On top of that, he says RM5,000 does not include filing fees and travelling. Worse still, he says he cannot guarantee I will get my money. Where I got money to pay the lawyer, the developer delayed my house for so long. I told the lawyer he can deduct from the money the developer has to pay me, but he says cannot. If the developer doesn’t pay I still have to pay his legal fees and expenses, he says. Where got justice?
I had just finished writing my last article (Damages for late delivery, Jan 25) in which I praised the Housing Tribunal for a job well done when I overheard the above conversation as I sat sipping coffee one Saturday morning.
Has my confidence in the Housing Tribunal been somehow, or somewhat, misplaced? I continued to wonder as I made my way to the National House Buyers Association (HBA) that Saturday for the weekly “Meet the Public” session.
What I was to hear that day were, sadly, more disheartening remarks about non-compliance of awards made by the Housing Tribunal against defaulting developers.
Has the Tribunal for Homebuyer Claims, commonly known as the Housing Tribunal, served its purpose or is it just a waste of time for house buyers?
The question is, perhaps, best answered by looking at the reasons why the tribunal was set up, and to do a simple comparison between the Housing Tribunal and the civil courts before looking at the issue of compliance.
A house buyer in despair
Let’s take a simple case of a house buyer who purchased a house from a housing developer at the price of RM200,000. Delivery of vacant possession is delayed for two years.
Under the sale and purchase agreement, the developer must pay liquidated damages amounting to RM40,000 for the delay. The house buyer is told to write in officially when he asks for payment. Dutifully, he does so, followed by several visits to the developers’ office, each time with the hope of seeing a cheque for RM40,000. Several letters follow, each less polite than the previous. Still there is no sign of any payment whatsoever. What is the house buyer to do?
David vs Goliath
Before the Housing Tribunal was set up 11 years ago, the only choice a house buyer had was to take the developer to court. Court proceedings were not just costly but extremely time-consuming, which, of course, suited the errant developers perfectly.
Many developers are known to have a battery of lawyers willing to go to court for them for free, in exchange for, or in the hope of, being placed on the developer’s panel for their projects. Developers were in no hurry to pay, and the legal system, with all its imperfections and eager-to-please lawyers, provided an excellent platform for irresponsible developers to buy time even in clear-cut cases against them. House buyers, most of whom had little or no resources at all, were easy victims to take advantage of.
I am well aware of cases taking not just months but years to dispose of, and I’ve had my fair share of crossing path with house buyers who settled for just a fraction of what they were entitled to because the legal case was taking too long and was too costly. Enforcing the judgement obtained was another matter. It was a sad but typical case of the strong verses the weak.
Housing Tribunal to the rescue
It was against such a depressing backdrop that in December 2002, parliament created the Housing Tribunal as an alternative platform for house buyers. It was to be an easy, cheap and speedy alternative forum for the ordinary people. Since it was to be a tribunal or “court” for the ordinary house buyers, numerous measures were taken to ensure that it was user-friendly and affordable, including a cap on filing fee at a nominal sum of RM10, thus keeping lawyers out.
Now, going back to our simple case above, how much would it cost the house buyer to obtain a judgement for the RM40,000?
RM10 for filing and some travelling and, perhaps, photocopying charges if he goes to the Housing Tribunal, compared with thousands of ringgit if he were to go to the magistrate’s court instead. Of course, cost is not the only issue, and I fully agree that a paper judgement is simply not worth the paper it is written on.
Let’s look at our example again, this time with our house buyer’s neighour in the picture for comparison. The house buyer goes to the Housing Tribunal and is given an order for the developer to pay him RM40,000. It costs him RM10, plus some travelling and photostating expenses. His neighbour decides to go to the magistrate’s court, pays his lawyers thousands of ringgit in legal fees and expenses and he too gets an order for RM40,000.
Court order vs tribunal award
What is the difference between the two orders? The one given by the magistrate’s court is often referred to as a “judgement” while the order from the Housing Tribunal is called an “award”.
Is the magistrate’s court judgement superior to the award from the Housing Tribunal? Definitely not, and this is because under the legislation (section 16AC(1)(b) of the Housing Development (Control and Licensing) Act, 1966 (HDA)), the Housing Tribunal’s award is deemed to be an order (in this case) of a magistrate’s/sessions court and can be enforced like a magistrate’s/sessions court judgement once it is registered at the relevant court of law. (Note: If the award is for RM50,000 – maximum monetary jurisdiction of the tribunal – or less, then it is deemed a judgement of the magistrate’s court).
In other words, the Housing Tribunal award is equivalent to (in this case) a magistrate’s court’s judgement.
In fact, one would not be wrong to say that an award made by the Housing Tribunal carries a lot more oomph because pursuant to section 16AD(1) of the HDA, whoever fails to comply with a Housing Tribunal award commits a criminal offence which is punishable with a fine not less than RM5,000 and exceeding RM10,000, or imprisonment not exceeding two years, or both.
In the case of a continuing offence, in addition to the above, the offender will also be liable to an additional fine not exceeding RM1,000 for each day or part of a day during which the offence continues after conviction.
How long does it take to get an award from the Housing Tribunal?
As far as I am aware, a house buyer is usually given a hearing date within a month of filing his/her claim. Pursuant to section 16Y(1) of the HDA, the Housing Tribunal is required to make its award without delay, and in any event within 60 days from the first hearing date, where practicable. Awards can even be given at the first hearing, if the papers are in order and duly served, and there are no legal complications or further investigations/inspection required.
The National House Buyers Association has, indeed, over the years been told of many cases whereby house buyers are given awards at the first hearing. What happens then if the developer refuses to pay? Unfortunately, both the house buyer and his neighbour will have to go for enforcement of the judgement/award to try and recover what is due from the developer.
Enforcement in both cases is done at the civil courts and includes proceedings such as attachment and seizure, judgement debtor summons and prohibitory orders. They can even resort to winding up the developer’s company. Whichever mode of enforcement they choose to proceed with, the lawyers treat it as separate from the work done in obtaining the judgement, and therefore, charge a separate fee for enforcement proceedings.
In conclusion, both the house buyer and his neighbour would have reached exactly the same stage, each armed with a judgement which is enforceable at the civil courts but one having already paid thousands of ringgit in legal fees and the other, next to nothing.
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 a NGO councillor at the Subang Jaya Municipal Council.