News: Tebrau Residence Buyers May Not Be Compensated For Late Delivery Of Their Home

Feb 18, 2021

After putting up with several delays in completion, buyers at Tebrau Residence in Johor Bahru suffered another blow when they learned that they may not receive the promised late delivery compensation.

The Perbadanan PR1MA Malaysia’s (PR1MA) project was originally set for completion in January in 2020 but was delayed several times partly due to the movement control order (MCO).

Completion was moved to October 2020, then to January, March and finally April 2021.

Want to know how much Liquidated Ascertained Damages (LAD) you would be able to claim when the vacant possession is delayed? Find out here.

A letter from PR1MA sighted by Free Malaysia Today (FMT), however, stated that the developer has received approval for Liquidated Ascertained Damage (LAD) exemption and is seeking an extension from the Ministry of Housing and Local Government (KPKT).

Under the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020, the exemption is allowed for the period from 18 March to 31 August 2020.

In its letter, PR1MA wants the exemption to be extended until 31 December 2020.

“This is very disappointing, we’re finished if we cannot get the LAD,” said a 34-year old buyer, who was among those who received the LAD for the late delivery of his home as per the sale and purchase agreement.

He was paid around RM7,200 on 5 November 2020, while another RM20,000 was promised to be given following vacant possession, when the housing unit is completed but not yet suitable for occupation.

“The morale of the buyers is low and we feel as if there is no hope for us,” the civil servant told FMT.

The man, who declined to be identified, said the PR1MA project has turned into a “nightmare” for buyers.

He also called on KPKT and PR1MA to explain why the project had no proper monitoring prior to the COVID-19 pandemic.

FMT previously reported that many of the buyers are facing financial difficulty forking out around RM2,000 per month for the loan repayments of their Tebrau Residence units while renting a home to stay in before they could move in.

On 22 February 2020, PR1MA CEO Mohd Nazri Md Shariff reportedly said that the buyers would be paid LAD after the keys were handed over to them. He was again quoted in May saying that RM28 million had been allocated to compensate buyers of all late PR1MA projects.

The COVID-19 Act provides that the period from 31 March to 31 August 2020 shall be excluded from the computation of LAD should the developer fail to deliver vacant possession of a housing unit. The Housing and Local Government Minister is allowed to grant an extension from 1 September to 31 December 2020.

Another Tebrau Residence buyer, Mohamad Isamuddin Isa, received a letter from PR1MA informing him that the application of the developer for LAD exemption was approved on 25 November 2020.

“This is the first time we have found out that PR1MA has received an exemption,” Isamuddin told FMT.

So far, he has received about RM5,000 and is owed another RM20,000.

“November 25 has been more than two months ago, and they never told us until now. They told us to wait (for the project’s completion), we waited. The completion date was extended several times, we waited for that, too,” he said.

“We were patient over the delays as we thought we would get the compensation. But now, they don’t want to pay us … that’s just too much.”

Another buyer, who wanted to be identified only as Yazid, called on PR1MA to fulfil its promise.

“They promised to pay last time. Now they’re using COVID-19 as an excuse,” he said, noting that he only saw a copy of the PR1MA letter in a WhatsApp chat group for owners.

Tebrau Residence is one of the five projects of PR1MA in Johor. The project sits on a 4.3ha of Malay Reserve land, featuring 1,284 units.


Image source from Google Maps 


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James Teoh
Senior Negotiator
Ideal Property Group
(+60) 12-6108848