9 Reasons Not to Increase the Housing Tribunal's Monetary Jurisdiction

The Tribunal for Homebuyer Claims, aka Housing Tribunal (Tribunal), was supposed to be ‘fast’, ‘cheap’ and simple’. How does it benefit house buyers if the Housing Tribunal’s monetary jurisdiction is increased to RM250,000 from the current limit of RM50,000?

In this article:

• Ill-advised or Unadvised Proposal?
• HBA Objections and Rationale
• The Strata Management Tribunal vs. The Housing Tribunal
• The Increase Should Not Exceed the Magistrate’s Court Jurisdiction

Stakeholders Meeting on The Amendments to HDAct And HDReg

As early as 18.8.2020, under the previous Government and the Ministry of Housing & Local Government (KPKT) then headed by YB Datuk Hjh Zuraidah Kamaruddin, the National House Buyers Association (HBA) was involved in the series of consultation under the subject: MAKLUM BALAS PEMEGANG TARUH BAGI SESI PERBINCANGAN KUMPULAN FOKUS (FGD) SIRI 1/2020 BAGI KAJIAN CADANGAN DAN PENGGUBALAN PINDAAN AKTA PEMAJUAN PERUMAHAN (KAWALAN DAN PELESENAN) 1965 DAN PERATURAN- PERATURAN (AKTA 118).

Subsequently, we were also involved in the follow-up consultations and continued to offer input and feedback on 28.1.2021 and 26.7.2022 under YB Dato Seri Reezal Merican, the immediate past Minister of Housing. The latest meeting was held on 26.6.2023 at Bahagian Perancang Perumahan, chaired by Puan Rosidawati bte Abd Rashid.

We had wondered whether the current KPKT Minister, YB Menteri Nga Kor Ming has been competently and adequately briefed, in a satisfactory manner, on the draft proposals/ amendments/ additions and forms initiated by the then Government (2 Ministers ago) in regards to the proposed amendments to the Housing Development (Control & Licensing) Act, 1966 (HDAct), HD Regulations (HDReg), Scheduled Sale & Purchase Agreements and Directions to understand their wide ramifications and implications to the housing industry, especially the house buyers.

READ MORE: Housing Tribunal Malaysia: How to Make a Claim?

One of the many ludicrous proposals was to increase the Tribunal’s monetary jurisdictional power from the current RM50,000 to RM250,000, a fivefold increase. That is a hefty sum and a BIG-TICKET ITEM.

Below is an excerpt of the current Section 16M of the HDAct:

PART VI Section 16M: Jurisdiction of Tribunal

Subject to section………. the Tribunal shall have the jurisdiction to determine a claim lodged under section……… where the total amount for which an award of the Tribunal is sought does not exceed fifty (RM50,000) thousand ringgit.

Ill-advised or Unadvised Proposal?

KPKT thinks it is doing aggrieved house buyers a great favour by increasing the monetary jurisdiction of the Tribunal from the current RM50,000 to RM250,000. KPKT expects house buyers to rejoice. KPKT could not accord us a logical explanation except to state that, inter-alia:

1. The proposal was proposed by former minister, Datuk Hjh Zuridah Kamaruddin.
2. That the monetary increase will correspond with the jurisdictional increase in the Consumer Tribunal from RM25,000 to RM50,000
3. That the increase is in line with the current monetary jurisdiction of the Strata Management Tribunal ie RM250,000

We really cannot fathom the motives of such a move. Is it a regressive proposal or a progressive one? Read on and understand better.

READ MORE: The Homebuyer’s Tribunal: Why it’s not as affordable and easy as it seems to make a claim

HBA Objections and Rationale

There are potential drawbacks and repercussions to consider when KPKT and their Minister make such a proposal. Here’s a breakdown of the rationale for retaining the existing monetary claim limit of RM50,000:

1. Tribunal decisions are subject to judicial review (JR). Since the amount proposed is to be increased to RM250,000, there is more reason for housing developers to file for a judicial review rather than settle or obey the Award. Thus, the Award will be rendered redundant.
2. Since lawyers are not permitted in the Tribunal, proceeding with large claims is prejudicial to the weaker party, house buyers. Lay buyers will not be properly advised of their legal rights and entitlements.
3.  Whatever is stated in the testimony at the trial at the Tribunal level will be recorded and used as evidence if the case is escalated to the High Court for JR.
4. The trend today is for developers to employ in-house lawyers/ law degree holders to represent them at the Tribunal and argue with case laws, authorities, expert witnesses etc. Their ‘expert witnesses’ could be their architects, engineers, land surveyors, building inspectors, lawyers, water leakage experts, and others under their payroll. Each of them may have a pecuniary interest in the project in that they were involved in it. It will be a case of David vs Goliath. Can aggrieved buyers defend themselves effectively?
5. If lawyers are allowed at the tribunal, it defeats the very purpose of having it in the first place. Affected house buyers—the victims—might as well file their cases in the Courts of Law from the onset.
6. Large claims will open the floodgates to JR by the Developers’ battalion of ‘free’ lawyers whilst the house buyers have to stomach the legal fees and expenses all by themselves. If they file their case in their own name, the JR process will obviously be against them in their personal capacity.
7. Who is in control of the game? It’s obviously the Developers. if the monetary claims increase to RM250,000.
8. The increase is both impressive and misleading. It gives false hope to the house buyer. There is no kindness in offering false hope. KPKT is, in fact, doing a disservice and grave injustice to the naive and innocent house buyers. They are being lulled into a false sense of belief and
9. The higher the stake the higher the possibility that the Developer will go even to the Apex Court. It would be worth their effort to conveniently delay the case for obvious reasons till the liquidation process precedes.

The Strata Management Tribunal vs. The Housing Tribunal

If the Minister aspires to increase the jurisdiction of the Housing Tribunal to RM250,000 in line with the Strata Management Tribunal (SMT), which is currently at RM250,000, then the Minister has been ill-advised for the following reasons:

1. The Strata Management Tribunal is just not restricted to housing per se; it includes ‘commercial development’ like mixed developments, strata shops, shopping malls, office complexes, strata factories, etc;
2. Their claims include common property/ facilities and common funds of all owners/ proprietors.
3. Their claims also include BIG ticket items involving sinkage in the common roof, cracks in the facade, defects and repair costs to the swimming pool, faulty passenger lifts, defective sauna and steam facilities, motor room, cooling tower, elevators and plumbing issues and a host of other items.
4. The claimants in SMT cases, apart from an individual, are the management bodies like Joint Management Body (JMB), Management Corporation (MC) and Subsidiary Management Corporation (SubMC), property developers, proprietor (including an original proprietor), managing agent and a host of other stakeholders.

The Increase Should Not Exceed the Magistrate’s Court Jurisdiction

If the Minister feels that the quantum of RM50,000 in the Housing Tribunal should be increased, perhaps any increase should not exceed the monetary jurisdiction of the Magistrate’s Court, i.e. RM100,000.

After all, the Award of the Tribunal, in the event of non-compliance under Section 16AD, is registered at the Magistrate’s Court for execution processes and prosecution purposes.

Please do not make proposals arbitrarily without first considering the big picture. The Minister must consider the possible actions and reactions of developers, who obviously are profit-driven, as well as the little guy, aka the house buyer, who thinks that the government is always right.