On Nov 26 2019, the Federal Court ruled that the Housing Controller can no longer grant an extension of time (EOT) to developers who are unable to construct or complete their projects on time. The new ruling is a great win for Malaysian homeowners.
What is Extension of Time (EOT) in construction contracts in Malaysia?Extension of time is one of the provision clauses in the standard contract form – in light of unforeseen circumstances, it allows developers more time to complete the project without being penalised. 
Under the terms of the Sale & Purchase Agreement (SPA) between a housing developer and the house buyer, the developer has to complete and hand over the house within 24 months (for landed properties) or 36 months (for stratified properties). If the developer fails to deliver within this period, the developer has to compensate the house buyer by paying liquidated damages (LAD) of 10% per annum on the purchase price for late delivery. 

However, there are contractors (which fail to meet the timeline) who seek opportunities to claim for an extension of time in order to avoid this additional loss or expense. When an EOT is granted (loosely) by the Housing Controller for a delayed project, it is essentially taking away the compensation or liquidated agreed damages (LAD) owed to homebuyers. 
Supposedly, an extension of time can only be granted in respect of an event that is expressly included in the contract as a “relevant event”, where the claimant must produce documentation which shows that not only are they not responsible for the delays, but also demonstrate the other parties that are responsible. This can either be the employer or other third parties including “Acts of God,” etc.
What does it mean when an EOT for delivery of vacant possession is given by the Housing Controller? Effectively, it means breaking the developer’s contract and delay in completing construction is excused and homebuyers cannot claim compensation for late delivery. Rights and protection given by Parliament is extinguished by the Housing Controller with a stroke of his pen: that is what it means. Ultimately the developer who committed the breach stands to benefit hundreds of thousands or even millions of ringgit at the homebuyers’ suffering. 
There had been a group of homebuyers who had suffered losses due to a delay in the completion of their homes by their developer. The Housing Controller ‘signed away’ their rights and remedies by granting the developer an Extension of Time (EOT) – thereby taking away any compensation the homebuyers were entitled to. 

The Monetary Policy Committee (MPC) of Bank Negara Malaysia decided to reduce the Overnight Policy Rate (OPR) by 25 basis points to 2.50%.It said the ceiling and floor rates of the corridor of the OPR are correspondingly reduced to 2.75% and 2.25%, respectively.
“The reduction in the OPR is intended to provide a more accommodative monetary environment to support the projected improvement in economic growth amid price stability. The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation,” Bank Negara said in a statement Tuesday.
The reduction in the OPR came largely in line with economists’ expectations. This is the second cut so far this year. In January, Bank Negara reduced the OPR by 25 basis points to 2.75% — the lowest since 2011.
The central bank noted that global economic conditions have weakened in the recent period. The ongoing Covid-19 outbreak has disrupted production and travel activity, especially within the region.
This has also led to greater risk aversion, resulting in tighter financial conditions and a resurgence in financial market volatility. Downside risks to the global growth outlook have increased, particularly in the near term. However, a number of countries have implemented policy responses. With further anticipated policy measures, these actions are expected to mitigate the economic impact of Covid-19.
“The Malaysian economy grew at a moderate pace of 4.3% in 2019. Looking ahead, growth, particularly in the first quarter, will be affected by the Covid-19 outbreak primarily in the tourism-related and manufacturing sectors. The weakness in the agriculture sector is also likely to persist in the first quarter.
“For 2020, private and public sector activities will be supportive of growth. Household spending is expected to grow at a slower pace amid moderate employment and income growth. Investment activity is projected to record a modest recovery, underpinned by ongoing and new projects, both in the public and private sectors,” it said.
The 2020 economic stimulus package will also provide some support to economic activity. Although domestic growth is expected to gradually improve in the second half of the year, there are key downside risks, mainly stemming from the evolving nature and prolonged impact of the Covid-19 outbreak, and continued weakness in commodity-related sectors.
Bank Negara said in 2020, headline inflation is expected to average higher but remain modest. The trajectory of headline inflation will be dependent on global oil and commodity price developments and the timing of the lifting of the domestic retail fuel price ceilings.
Underlying inflation is expected to be more moderate, amid limited demand pressures despite the continued expansion in economic activity.
Source: TheStar.com.my

The Penang government is calling all housing developers to work with the state to develop affordable housing projects.
State Local Government, Housing, Town and Country Planning Committee chairman Jagdeep Singh Deo said the state government would continue to lend their support and assist developers who are keen on developing affordable housing projects.
“Our main priority is to ensure that there are affordable housing projects for all Penangites.
“And when we know that we have private sector players like you who want to assist us, we will make sure that we make it feasible, viable and practical for you to come onboard.
“This project is proof of that,” Jagdeep said in his speech at The Park @ Mak Mandin CCC handover ceremony today.
The project was developed by Silver Channel Sdn Bhd.
Jagdeep said that the Penang government also prioritised livability.
“It is not just providing affordable homes. We must also ensure that the homes are livable,” he said.
Jagdeep added that a total of 103,721 housing units have been built, are being built and have been approved to be built in Penang to date.
He said that building affordable housing units was the ‘right direction’.
“I have received complaints from housing developers that the economy is soft and it is difficult to sell homes.
“Let me rebut the complaints here. Follow this direction and build affordable homes. You will not regret it.
“I was made to understand that The Park @ Mak Mandin project is 100% sold,” he said.
Jagdeep said: “If you (housing developers) want to continue building homes that cost RM1 million or RM1.5 million, you build them at your own risk.”
“Whereas, you are be able to sell homes if you build affordable homes. The state will push for this because it is for the people,” he added.
Silver Channel Sdn Bhd chairman Datuk Musa Mustakim said the company was honoured to received the Certificate of Completion and Compliance (CCC) status four months ahead of schedule.
“Thumbs up to the Penang government for its double winning strategy – firstly for relocating squatters to safer and proper homes; and secondly, in allowing future generations to own affordable homes at a strategic location here in Bagan.
“Standing on a 10-acre land, The Park @ Mak Mandin is a low-density affordable housing project.
“The selling price for each unit is only RM247,000 and the home owner gets to enjoy a spacious 1,002sq ft, three-bedroom home.
“There are also facilities such as a half-sized Olympic pool and fiber-optic Internet. The property is also gated and guarded,” he said in his speech.
Also present at the ceremony were Penang Youth and Sports Committee chairman Soon Lip Chee, state Welfare, Caring Society and Environment Committee chairman Phee Boon Poh, Seberang Perai City Council mayor Datuk Rozali Mohamud and Chief Minister of Penang Incorporated (CMI) deputy general manager S. Bharathi.
Source: Buletin Mutiara