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Messrs Lui & Bhullar
Jul 27

SUCCESSFUL DEFECTS CLAIM AGAINST A DEVELOPER IN MALAYSIA

By:


Bryan Lui (Co-Managing Partner) [bryanlui@luibhullar.com]

Harneshpal Karamjit Singh (Co-Managing Partner) [harnesh@luibhullar.com]


home buyer's defects claim


Buying a new home is an exciting milestone, but it can quickly turn stressful and costly if you encounter defects. Structural issues, faulty appliances, and other defects can turn your dream home into a nightmare.


Understanding your rights as a home buyer is essential for navigating these challenges effectively.

The Statutory Sale and Purchase Agreement (SPA) under the Housing Development (Control and Licensing) Act 1966 (HDA) provides a framework for addressing property defects. Here’s a step-by-step guide to help you handle defect claims and protect your interests.


Defect Liability Period

According to Clause 30 of the SPA, the developer must address any defects within a defect liability period of 24 months from the date of vacant possession (VP). During this time, you have the right to request the developer to rectify any issues with the property.


Steps for Making Defect Claims

  1. Identify Defects: After taking vacant possession, thoroughly inspect your property and document any defects. Consulting a defect inspector can provide a detailed assessment.

  2. Serve Written Notice: Send a written notice to the developer detailing the defects you’ve found. The developer is required to address these issues within 30 days of receiving your notice.

  3. Follow-Up Action: If the developer does not resolve the defects within the initial 30-day period, take further action:

  4. Issue a second written notice, including a quotation from a contractor for the necessary repairs.

  5. Allow the developer an additional 30 days to rectify the defects.

  6. Commence Repairs: If the defects remain unaddressed, proceed with repairs through your contractor.

  7. Notify the stakeholder lawyers under Clause 30(4) of your intention to claim the stakeholder sum as per item 5 of the 3rd Schedule of the SPA.

  8. You can claim the repair costs from the developer based on the provided quotation.


The Total of 5% Held by the Stakeholder Lawyer

Under Clause 30(4), the stakeholder solicitor must withhold 2.5% of the payment until 8 months after you take vacant possession. The remaining 2.5% will be released only after 24 months from the date of vacant possession (Defect Liability Period).


Home Buyer’s Rights

Even if the defect liability period has expired, you still have the right to pursue legal action against the developer for defects under common law.


The Court of Appeal’s decision in Chrishanthini Angela Regina a/p Sebastiampillai v View Esteem Sdn Bhd [2022] MLJU 2304 reaffirms this right. The court stated:


“[28] A careful consideration of cl 29 SPA would show that it is not intended to bar a purchaser from asserting the common law rights to claim for damages under the SPA. The legal framework of cl 29 is such that it is but a mechanism for the purchaser to ensure that defects which shall become apparent within 24 months after VP are rectified. This is provided the 30 days’ notice is received.”


This ruling highlights that while Clause 30 ensures defects are addressed promptly, it does not negate your right to seek damages for defects through common law channels.


Please contact us for a free consultation via WhatsApp (+60143000960) or E-mail (admin2@luibhullar.com) for any queries regarding Housing Development matters.




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