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Developers slammed for gagging house buyers over faulty units
Published on: Thursday, May 26, 2022
By: FMT Reporters
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A lawyer says there is no need for non-disclosure agreements between developers and house buyers
PETALING JAYA: A consumer advocacy group has denounced property developers who require house buyers to sign an agreement to prevent them from speaking about defects in construction that are remedied during the defective liability period (DLP).

National House Buyers Association secretary-general Chang Kim Loong told FMT he was concerned that “rogue developers” were trying to silence purchasers through the non-disclosure agreement (NDA).

“House buyers who sign the NDA would be exposed to potential legal action if they share with others details of the defects in their properties,” he said.

“This must be stopped.”

He advised house buyers against signing such an agreement.

A Klang Valley resident recently claimed to have signed an NDA following repairs made to the unit during the DLP. FMT is withholding the identities of both the developer and the resident.

Lawyer V Rajadevan told FMT: “I don’t see the need for an NDA unless the developer is trying to hide the fact that a claim for liability has been settled or is worried about bad publicity.”

He also said the law recognised the developer’s liability to make repairs during the 24-month DLP, which starts from the date purchasers receive vacant possession of their homes.

“If a developer forces a buyer to sign an NDA as a condition for repairs, then legal action can be taken because it is the developer’s duty to make good the defects during the DLP.”

He said the only way to defeat a signed NDA was to challenge it in court, but there would be no reason for a purchaser to take legal action if the defects had been repaired.

The NDA would not apply to subsequent defects and the purchaser could claim for damages if there were such defects, he said.

The Federation of Malaysian Consumers Associations (Fomca) urged house buyers forced to sign NDAs to lodge reports with the housing and local government ministry.

“The ministry must protect house buyers from irresponsible developers, and its officials should visit units with shoddy workmanship after receiving complaints,” said Fomca senior manager S Baskaran.

He told FMT that Fomca had received complaints from many consumers who faced much hardship after the DLP because the repairs were poorly done.

“If the property is defective, then what is sold by the developer is not as advertised,” he said. “This can be construed as misleading advertising.”


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