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Ruling on housing tribunal s scope raises more questions

THE next time you take vacant possession (VP) of your new home, you may want to thoroughly check that the property is indeed what you paid for. And if it is not exactly what was specified in the sale and purchase agreement (SPA), it would be best not to commence any work on it, especially if you plan to turn to the Tribunal for Homebuyer Claims for recourse. On Feb 10, the Federal Court made a landmark ruling on the scope of and powers of this tribunal, stating that it can only decide on claims against what was expressly stipulated in the SPA, and not based on the purchaser’s expectations or what was displayed in the developer’s showroom.

Date of booking fees deemed as start of late delivery charges will force developers to review their sales plan

DEVELOPERS may not be in such a rush to collect booking fees in the future following a recent Federal Court ruling that not only is such a practice expressly prohibited by the law, but perhaps more crucially, that the calculation for late delivery of a house commences from the date a booking fee is paid, and not when the sale and purchase agreement (SPA) is signed. Commenting on the recent landmark ruling, legal experts say developers will likely be more cautious about collecting a booking fee or initial payment on a house as this would be considered illegal. Furthermore, they expect new residential SPAs to be signed only when developers are genuinely ready to commence a project, a move that could potentially deter them from building too many houses unless there is strong demand and help to reduce the significant property glut (see accompanying story, “What should developers do moving forward?”).

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