25 October 2020

[Property] What is the Covid-19 Act? How does this act affect the property sector and homebuyers?

The Temporary Measures for Reducing the Impact of Coronavirus Diseases 2019 (Covid-19) Act, which was gazetted on 23 October 2020, has offered some solutions to the property industry stakeholders and property buyers.

The said act was approved by the Dewan Rakyat and Dewan Negara on Aug 25 and Sept 22 respectively.

Here is a Summary of the Measures:
  • The act will be in effect for two years from the date of its broadcast in the government gazette on Oct 23, or in accordance with whichever date or duration of enforcement as allocated in any section related to the act.

  • Any party with contractual disputes can seek resolution without involving court proceedings through the intermediary services of the Covid-19 mediation centre (PMC-19)

  • The mediation service conducted by PMC-19 was open to everyone with disputes valued RM300,000 and below.

  • The government will bear the costs of the mediation service for B40 and M40 categories as well as micro and small industries.

  • For the agreement signed between purchasers and developers before March 18, if the purchasers failed to serve their housing loan installment between March 18 – Aug 31, 2020, developers should not impose late payment charges on the unpaid installment. Purchasers could apply for extension up to Dec 31, 2020.

  • For the property developments which should be delivered between March 18 – Aug 31, 2020, developers could apply to the government to extend the time of delivery of vacant possession up to Dec 31, 2020.

  • For the Defect Liability Period (DLP):

    Any agreement signed between the purchaser and developer, for the period from March 18 – Aug 31, 2020, should be excluded from the calculation of DLP. Purchasers could submit an application to the Local Government and Housing ministry for an extension of up to Dec 31.

  • For the Tribunal for Homebuyer Claims, if the limitation period to file a claim has expired during March 18 – June 9, 2020, the homebuyer is entitled to file claim from May 4 – Dec 31, 2020, and the Tribunal for Homebuyer Claims shall have jurisdiction to hear such claim.

  • Inability to perform contractual obligation:

    For any parties who are unable to perform any contractual obligation arising from any of the categories of contracts due to the measures under the Prevention and Control of Infectious Diseases Act 1998 [ Act 342], shall not be the reason for the other party to exercise the rights under the contract.

Any disputes arising out of this may be settled by way of mediation.

These contracts include:
  1. Construction work related contract (including consultancy and supply of materials, workers and equipment);
  2. Performance bond or equivalent that is granted pursuant to a construction or supply contract;
  3. Professional service contract; 
  4. Lease or tenancy of non-residential immovable property;
  5. Event contract for venue, accommodation, amenity, transport, entertainment, catering or other goods or services including, for any business meeting, incentive travel, conference, exhibition, sales event, concert, show, wedding, party or other social gathering or sporting event for the participants attendees, guests, patrons or spectators of such event;
  6. Contract by a tourism enterprise as defined under Tourism Industry Act 1992 [Act 482] and a contract for the promotion of tourism in Malaysia;
  7. Religious pilgrimage-related contract.

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