Why Partial CCC should be disbarred for all homebuyers’ sakes

Is Partial CCC issuance really a ‘legislative anomaly’ as alleged by some industry stakeholders? In this article, we look into why disbarring the partial CCC is necessary for protecting homebuyers’ rights.

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Recently, the article ‘Partial CCC issuance a legislative anomaly’ published in the Property Take of the Sun issue of 6.12.2019 seemed to suggest that there appears to be a ‘legislative contradiction’ or ‘anomaly’ when the Strata Title Act (STA) 1985 (Act 318) and the Uniform Building By-Law (UBBL) 1984 (amendment 2007) are read together with the Housing Development (Control & Licensing) Act (HDA) 1966 (Act 118).

The authors elaborated that the STA endorses phase development in the form of provisional block and the UBBL facilitates the fitness of such phased developments for partial occupation – in the form of a Partial Certificate of Completion and Compliance (Partial CCC) or Form F1. However, there are no such corresponding/complementing provisions under HDA to accommodate such practice.

On the contrary, the HDA forbids the use of Partial CCC in delivery of Vacant Possession (VP) to buyers.

Usually, only a certificate of completion and compliance (CCC), which acknowledges that a building or development is fit for occupation, will be issued for the project to be approved for its VP. However, partial CCCs are being issued before the Certificate of Practical Completion (CPCs) stage, when the developer wishes to allow part of a development to be occupied, before the project is 100% completed.

HBA has been prompted by various professionals in the business and readers to rebut the perception to avoid confusion. The following is our take:

1. The Laws are clear in intending that Partial CCC should not be allowed for VP

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The so-called ‘contradiction’ / ‘anomaly’ can easily be reconciled and addressed through the legal maxim of Generalia Specialibus Non Derogant – which means that the provisions of a general statute (in apparent conflict/contradiction) must yield to those of a special one

Let’s look at the intention and emphasis of these individual legislations and the controversial Partial CCC.

Strata Title Act 1985 (Act 318)

Act 318 is a piece of primary legislation, which governs the subdivision of buildings into parcels with the issuance of strata titles. It covers both housing and non-housing buildings such as commercial spaces in the form of offices, retail outlets, etc.

Uniform Building By-Law (UBBL) 1984 (amendment 2007)

UBBL is a secondary legislation, which among others, regulates building codes for buildings in general. It covers both housing and non-housing buildings such as commercial, institutional, public and other private buildings.

Partial Certificate of Completion and Compliance (Partial CCC)

The rationale of Partial CCC is to allow a partially completed part of a building to be occupied, provided that this particular ‘part’ is self-functioning and sustaining, with all the essential services and amenities serving this ‘part’ duly completed.

Housing Development (Control & Licensing) Act 1966 (Act 118)

Act 118 is a Statute to provide for the control and licensing of the business of housing development in Peninsular Malaysia, the protection of the interest of purchasers and for matters connected therewith. In other words, HDA is a specialised legislation dealing with housing issues under its strict provisions.

The intention and emphasis of Act 118 is best illustrated by the Federal Court on Nov 26 2019, in its judgment in the landmark case known as Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar & Pengawal Perumahan, which ruled that the housing controller has no power to waive or modify provisions of the contracts of sale as prescribed by regulations 11(1) and (2) of the Housing Development (Control and Licensing) Regulations, 1989 (1989 Regulations).

Her Ladyship Chief Justice Tan Sri Tengku Maimum Tuan Mat had emphasised in no uncertain terms in the judgment that Act 118 (Housing Development (Control & Licensing) Act 1966) is a ‘social legislation’ intended to protect homebuyers. The interests of the purchasers shall be the paramount consideration against the developer.

Henceforth, the non-provision/application of Partial CCC can hardly be construed as a ‘contradiction’ or an ‘anomaly’ at odds with the other 2 pieces of legislation –, when in fact, it was the intention of the Act.

This can be inferred from the fact that Partial CCC was explicitly precluded from as one of the quintessential VP conditions:-
i) Sec.3 of the Housing Development (Control & Licensing) Act 1966(Act 118);
ii) Clause 1 (b) Schedule G; and
iii) Clause 1 (c) Schedule H, Clause 1(b) Schedule I and Clause 1(c) Schedule J

The exclusion is a testament that the issue of Partial CCC had indeed been deliberated, considered and left out in good measure.

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2. Why the Partial CCC is a bad idea

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A partially completed scheme due to ‘phased development’ is known to have created a litany of problems for the purchasers/owners/occupants, among other things.

First of all, there is a risk of incompletion of the overall neighbourhood for the occupants of the earlier phases – in the event where the developer may abandon the project halfway or unable to continue with the subsequent phases, due to financial burden or winding up.

For example, imagine a podium for a shopping mall with a residential tower block(s) sitting on top of it. What would happen if the developer abandons the construction of the podium block after the issuance of Partial CCC to the purchasers of the residential tower block(s), due to low take-up rate of the retail outlets? The purchasers will have to put up with the partially completed structure and worst still, they have to go through the unfinished areas daily if both the podium and tower block(s) happen to share a common access. The abandoned podium will induce breeding ground for mosquitoes, rats, rodents, insects as well as other undesirable elements.

Not only will it be an eyesore to the neighbourhood, but there will also definitely be a reduction in the value of their property as a direct consequence of such abandonment.

Even if the podium phase is not abandoned, the subsequent ongoing construction activities will create a host of potential security threats, safety and health hazards caused by sounds, smog, noise and dust pollution to the purchasers of the earlier phase as well.

3. Partial CCC “does not exist” under the HDA to safeguard the interests of purchasers

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The drafters of the legislation in their wisdom did not see it (Partial CCC) fit to be included along with CCC, in the best interests of the homebuyers. Despite it being provided under the UBBL, it is a decision that is in line with the legal maxim of Generalia Specialibus Non Derogant – where the general legislations of STA and UBBL must yield to the specialised one – which ultimately points to the HDA, in the respect of mode of VP. Thus, the issue of ‘contradiction’ /’anomaly’ does not arise at all.

This is especially important, in the wake of the current problems faced by homebuyers:

i) The amount of problematic projects, which is still languishing at a staggering 360+ cases as at 2019 with no sign of abating anytime soon.

ii) The number of errant developers blacklisted by the Ministry of Housing, as published at the website of Jabatan Perumahan Negara (Ministry of Housing and Local Government)

iii) the rampant nature of shoddy workmanship experienced by the homebuyers and others,

The exclusion of Partial CCC from the HDA represents only a small step in pre-empting and mitigating the potential harm that could be inflicted unto unwary homebuyers, who have suffered in silence for perhaps far too long.

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