LATE DELIVERY OF VACANT POSSESSION DURING COVID-19 PANDEMIC & MCO LOCKDOWN

By:

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

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

The Malaysian Movement Control Order (‘MCO’) caused delays in delivering Vacant Possession of properties, leading developers to potentially seek for extensions.

Extension Of Time Pursuant To The Covid-19 Act

Malaysia's Covid-19 Act provides an automatic extension of time of 167 days which excludes the period (18th of March 2020 until the 31st of August 2020) from the calculation of potential claims for Liquidated Ascertained Damages (‘LAD’).

Sections 35 and 38C of the Covid-19 Act 2020 allow developers to apply for additional time to deliver vacant possession (VP), which must be approved by the Minister.

Section 38C pertains to the delivery of VP and completion of common facilities. Developers have the option to request the exclusion of any period between January 1, 2021, and December 31, 2021, from the calculation of the VP delivery or completion of the common facilities timeline.

To qualify for this exemption, the following requirements must be met:

i) The Minister must be satisfied that the developer is unable to deliver VP due to measures implemented to control or prevent the spread of Covid-19 under the Prevention and Control of Infectious Diseases Act 1988.

ii) The first agreement was entered into before May 31, 2021.

iii) The application to exclude the period was made prior to the expiration of the VP or common facilities delivery time stipulated in the agreement.

Challenging The Decision

Anyone adversely affected by the decision can initiate a Judicial Review, including public interest cases for social rights.

Grounds for challenge include acting beyond powers, unconstitutionality, unreasonableness, and denial of rights.

Successful reviews can be remedies like quashing the decision, declaration of rights, mandamus order, prohibition orders, and damages. There is a three(3) month’s time limit for the filing and while exhausting alternative remedies are generally advised, it is not always mandatory.