NEWSLETTER

VOL 7 NO 1.0 MARCH 2008 KDN NO. PP 12544/10/2007

REAL ESTATE

The Housing Development (Control And Licensing) (Amendment) Act 2007
IN THIS ARTICLE, ANITA BALAKRISHNAN REVIEWS THE PROVISIONS OF THE NEW SECTION 22D OF THE HOUSING DEVELOPMENT (CONTROL AND LICENSING) ACT 1966, WHICH WAS INTRODUCED BY VIRTUE OF SECTION 27 OF THE HOUSING DEVELOPMENT (CONTROL AND LICENSING) (AMENDMENT) ACT 2007. The Housing Development (Control And Licensing) (Amendment) Act 2007 (“HDA Amendment Act”) was gazetted on 15 February 2007 and came into operation on 12 April 2007. The HDA Amendment Act was passed to amend various provisions of the Housing Development (Control And Licensing) Act 1966 (“HDA 1966”), which regulates the control and licensing of the business of housing development in West Malaysia and other matters connected therewith. One of the key changes brought about by the HDA Amendment Act is the introduction of a new Section 22D as follows:“22D(1) For the avoidance of any doubt, an absolute assignment in writing, under the hand of the assignor of the housing accommodation, not purporting to be by way of charge only, of the proprietary right or interest in the housing accommodation and the legal chose in action in the sale and purchase agreement in respect of the housing accommodation, of which express notice in writing has been given to the housing developer by the assignor in the manner set out in subsection (2) shall be deemed to have been effectual in law to pass and transfer the proprietary right, interest, chose in action and all legal and other remedies for the same to the assignee, from the date of the receipt of such notice by the housing developer, and the concurrence of the housing developer shall not be required”. With the coming into force of Section 22D of the HDA 1966, with effect from 12 April 2007:• The vendor of a housing accommodation for which the separate document of title has not been issued is not required to obtain the consent of a developer to the sale and transfer of the housing accommodation to a new purchaser. The definition of housing accommodation has been amended by the HDA Amendment Act 2007 to mean “any building tenement or messuage which is wholly or principally constructed, adapted or intended for human habitation or partly for human habitation and partly for business premises and such other type of accommodation as may be prescribed by the Minister (of Housing and Local Government) from time to time to be a housing accommodation pursuant to Section 3A of the HDA”.

000 or to imprisonment for a term not exceeding 3 years or both4. notice of the sale and assignment of the housing accommodation to the new purchaser.000 but which shall not exceed RM100. in which case the requirement for the assignor to furnish the housing developer with a stamped sale and purchase agreement shall not be applicable3. Similarly. • The vendor is however required to deliver to the housing developer. if applicable. with a letter of undertaking from the new purchaser or the new purchaser’s financier. at or after the completion of the sale and purchase between the assignor and the new purchaser. fails or refuses to provide any confirmation in contravention of Section 22D(4) or imposes any condition or any other fee in respect of any matter arising from Section 22D(4) • (b) (c) (d) The Housing Development (Control And Licensing) (Amendment) Act 2007 2 . as the case may be. proper and accurate register of all purchasers of the housing accommodation until the separate or strata titles for all the housing accommodation in a housing development have been issued by the appropriate authority and registered in the names of all the purchasers of the housing accommodation in that housing developer. a duly executed deed of absolute assignment between the assignor and the new purchaser of the housing accommodation together. imposes any condition to any absolute assignment or assignment by way of charge including requiring the new purchaser to execute any additional agreement or make any other payment in contravention of Section 22D.For the purposes of Section 22D. fails to keep and maintain an up-to-date. be liable to a fine which shall not be less than RM50. • Any person who requires any consent from a housing developer to any absolute assignment or assignment by way of a charge in contravention of the provisions of Section 22D shall be guilty of an offence and shall. and full payment of all sums and outgoings due to the housing developer under the sale and purchase agreement2. (b) (c) It is provided in the HDA 1966 that the expression “completion of the sale and purchase” in Section 22D(2) in relation to a deed of absolute assignment executed in favour of a purchaser’s financier or any beneficiary under the estate of a deceased purchaser or an assignee under an absolute assignment whether with or without consideration not in pursuance of a sale and purchase agreement shall mean the date of that deed of absolute assignment. to deliver the duly stamped deed of absolute assignment within fourteen days after the same has been stamped. such notice to be accompanied by the following:(a) a duly stamped sale and purchase agreement between the assignor and the new purchaser of the housing accommodation. any housing developer who:(a) requires any consent to any absolute assignment in contravention of the provisions of Section 22D. on conviction. references to “new purchaser” shall include a purchaser’s financier or any beneficiary under the estate of a deceased purchaser or an assignee under an absolute assignment whether with or without consideration1.

was granted before 12 April 2007.5% of the purchase price whichever shall be lower in return for the developer endorsing its consent to the purchaser's assignment to any third party. the current chargee or assignee of the housing accommodation. interest and title in and to a property to third parties without the consent of the proprietor or developer and the purchaser shall give notice of the assignment to the proprietor or developer provided: (a) the purchaser has fully paid the purchase price and duly complied with all the terms and conditions and stipulations on the purchaser’s part contained in the sale and purchase agreements. or The Housing Development (Control And Licensing) (Amendment) Act 2007 3 .shall also be guilty of an offence and shall. Section 22D(4) of the HDA 1966 imposes an obligation on a housing developer to provide all necessary and accurate confirmation of the records in the register whenever requested by a purchaser of the housing accommodation or the purchaser’s solicitors or the purchaser’s financier or the financier’s solicitors subject to a payment of a fee not exceeding RM50 or such amount as may be prescribed from time to time for meeting every request for confirmation in respect of all of the following:(a) (b) (c) (d) (e) full particulars of the housing accommodation.000 but which shall not exceed RM100. also be liable to a fine which shall not be less than RM50. (f) The Bar Council is of the following view6 with regard to matters not specifically addressed by Section 22D of the HDA 1966 : • If a developer’s consent.000 or to imprisonment for a term not exceeding 3 years or both5. on conviction. such other matter as may be prescribed from time to time. the current purchaser of the housing accommodation. • • The Housing Development (Control and Licensing) (Amendment) Regulations 2007 which came into operation on 1 December 2007 has substituted the sale and purchase agreements prescribed under Schedule G and Schedule H of the Housing Development (Control And Licensing) Regulations 1989 with new agreements. conditional or otherwise. and accordingly. there is no obligation on a vendor to pay to the developer the administrative fee stated in the Principal SPA. then the pursuit of the developer’s consent should be abandoned as it is no longer required. the postal address of the housing accommodation. The amended agreements provide expressly that a purchaser may assign all his rights. and the conditions or payment imposed or required have not been fulfilled or paid and the developer has not endorsed its consent on an assignment. the total amount due to the developer under the sale and purchase agreement as at the date of the confirmation. the provisions of Section 22D of the HDA 1966 shall prevail. The endorsement of the consent of a developer is also not required to be obtained in relation to a deed of Receipt and Reassignment. In the case of sales and purchases of housing accommodation for which the separate document of title has not been issued and for which also there is a right under the sale and purchase agreements between the developer and the original purchaser (“Principal SPA”) for the developer to charge an administrative fee of RM500 or 0.

ANITA BALAKRISHNAN REAL ESTATE PRACTICE GROUP For further information concerning amendments to the JDA 1966. HDA 1966 Section 22D(2). HDA 1966 3 Section 22D(8). please contact Sar Sau Yee sysar@shearndelamore. the purchaser’s financier has provided the developer with the purchaser’s financier’s unconditional undertaking to pay the loan sum in the manner set out in the sale and purchase agreement and the developer has provided the purchaser’s financier with the developer’s undertaking to refund the loan sum in the event the memorandum of transfer in favour of the purchaser cannot be registered for any reason not attributable to the purchaser. HDA 1966 5 Section 22D(6).com See Guat Har guat@shearndelamore. HDA 1966 6 Circular No. HDA 1966 4 Section 22D(5).com 1 2 Section 22D(7). 104/2007 dated 17 May 2007 The Housing Development (Control And Licensing) (Amendment) Act 2007 4 .(b) before the full payment of the purchase price.