Extension of Time (EOT) can no longer be granted to developers, good news for homebuyers

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.