More affordable housing making its way to market
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According to judicial commissioner Leong Wai Hong, the developer was obliged to fulfil its end of the agreement because it had committed with the buyers to deliver a residential development with particular features.
Leong declared that the LakefrontVilla @Cyberjaya development project was a residential development project with 110 units.
He further declared that the project should only include residential units and granted an injunction to prevent the defendants or their representatives from moving forward with any commercial development.
The home buyers filed their suit last year, naming the developer Lakefront Residence Sdn Bhd, registered landowner Timeless Hectares Sdn Bhd, and MCT Bhd (now known as Avalan Bhd) as defendants.
They alleged that Lakefront Residence and Timeless Hectares are wholly owned subsidiaries of MCT Consortium Bhd. MCT Consortium is a wholly owned subsidiary of MCT.
The owners of the villas and bungalows claimed that the proposed commercial development violated the assurances given to them in 2014 as well as the conditions of their respective sale and purchase agreements (SPA) entered into between 2014 and 2020.
MCT distributed brochures to potential purchasers announcing the project's launch in 2014, which involved the construction of 110 exclusive villas priced between RM1.8 million and RM3.6 million.
In 2017, the developer converted a portion of the land for commercial purposes, but the local authority, Sepang Municipal Council, rejected the planning authorisation two years ago.
The Selangor appeals board, however, allowed the developer's appeal.
However, Leong said that based on the facts, MCT had made representations and promises to the buyers during the promotion phase on their websites, newsletters, brochures, and in the show model in its showroom.
Although there were disclaimers on the brochures, the court found that they could not be relied on since they were in such small print.
"A disclaimer that cannot be read by the normal eye has no valid legal effect," Leong ruled, adding that MCT made the representation on behalf of or in complicity with the two other defendants and that the disclaimers had no legal effect.
Although the companies argued that the house buyers did not have locus standi (legal standing) to file the suit because they did not represent the joint management body (JMB), Leong ruled that the law is settled that an SPA is an individual contract between a house buyer and the developer.
"The house buyer is therefore entitled to pursue his individual contractual rights as a private cause of action without the need to rely on the JMB to sue on his behalf. To impose such a burden would, in my respectful view, be a travesty of justice," he said.
In his 68-page decision, Leong quoted a Malay proverb, Kata itu kota, which indicates that a commitment made must be kept, or, in English, "A man's word is his bond."
