PRACTICE FORUM - Stage Completion Certification under HDA

12/16/2014

Presented by Ar. Ezumi Harzani Ismail (pics credit).

Act 118 - Housing Development Act 1966

An Act to provide for the control and licensing of the business of housing development in Peninsular Malaysia, the protection of the interest of purchasers and for matters connected therewith.

What is ‘Housing Development’? Act 118 : Section 3. Interpretation.

In this Act, unless the context otherwise requires— “housing development” means to develop or construct or cause to be constructed in any manner whatsoever more than four units of housing accommodation and includes the collection of moneys or the carrying on of any building operations for the purpose of erecting housing accommodation in, on, over or under any land; or the sale of more than four lots of land or building lots with the view of constructing more than four units of housing accommodation;

“housing accommodation” includes any building, tenement or message which is wholly or principally constructed, adapted or intended for human habitation or partly for human habitation and partly for business premises and such other type of accommodation as may be prescribed by the Minister from time to time to be a housing accommodation pursuant to section 3A;

Note: Message - term used in law that carries meaning of dwelling house.

Standard Sale and Purchase Agreement

HOUSING DEVELOPMENT (CONTROL AND LICENSING) REGULATIONS 1989

Sub-regulation 11. Contract of sale.

(1) Every contract of sale for the sale and purchase of a housing accommodation together with the subdivisional portion of land appurtenant thereto shall be in the form prescribed in Schedule G and where the contract of sale is for the sale and purchase of a housing accommodation in a subdivided building, it shall be in the form prescribed in Schedule H.

Schedule G: SALE AND PURCHASE AGREEMENT (LAND AND BUILDING)

Schedule H: SALE AND PURCHASE AGREEMENT (BUILDING OR LAND INTENDED FOR SUBDIVISION INTO PARCELS)

Schedule G: SALE AND PURCHASE AGREEMENT (LAND AND BUILDING)

Clause 4. Schedule of Payments

(1) The purchase price shall be paid by the Purchaser to the Vendor by installment and at the time and in the manner as prescribed in the Third Schedule. The Vendor is not bound to commence or complete the works in the order referred to in Third Schedule and the Purchaser shall pay the installments according to the stage of works completed by the Vendor…

(2) Every notice referred to in the Third Schedule requesting for payment shall be supported by a certificate signed by the Developer's Architect or engineer in charge of the housing development and every such certificate so signed shall be proof of the fact that the works therein referred to have been completed.

THIRD SCHEDULE: G

1. Immediately upon the signing of this Agreement 10%

2. Within twenty-one (21) working days after receipt by the Purchaser of the Vendor's written notice of the completion of:-

(a) the foundation of the said Building 10%

(b) the structural framework of the said Building 15%

(c) the walls of the said Building with door and window frames placed in position 10%

(d) the roofing, electrical wiring, plumbing (without fittings), gas piping (if any) and internal telephone trunking and cabling to the said Building 10%

(e) the internal and external finishes of the said Building including the wall finishes 10%

(f) the sewerage works serving the said Building 5%

(g) the drains serving the said Building 5%

(h) the roads serving the said Building 5%

3. On the date the Purchaser takes vacant possession of the said Building, with water and electricity supply ready for connection 12.5%

4. On the date the Purchaser takes vacant possession of the said Building as in item 3 2.5
as follows: -

(a) where separate document of title to the said Lot has been issued and the Proprietor/Vendor has executed and delivered to the Purchaser….

(b) where separate document of title to the said Lot has not yet been issued, to be held by the Vendor’s solicitors as stakeholder for payment to the Vendor within twenty-one (21) working days…

5. On the date the Purchaser takes vacant possession of the said Building as in 5 item 3 and to be held by the Vendor's solicitor as stakeholder for payment to the Vendor as follows:

(a) two point five percentum (2.5%) at the expiry of eight (8) months after the date the Purchaser takes vacant possession of the said Property;

(b) two point five percentum (2.5%) at the expiry of twenty-four (24) months after the date the Purchaser takes vacant possession of the said Building.

TOTAL 100%

THIRD SCHEDULE: H

1. Immediately upon the signing of this Agreement 10%

2. Within twenty-one (21) working days after receipt by the Purchaser of the Vendor's written notice of the completion of:-

(a) the work below ground level of the said Building comprising the said Parcel including foundation of the said Building 10%
(b) the structural framework of the said Parcel 15%

(c) the walls of the said Parcel with door and window frames placed in position 10%

(d) the roofing, electrical wiring, plumbing (without fittings), gas piping (if any) and internal telephone trunking and cabling to the said Parcel 10%

(e) the internal and external finishes of the said Parcel including the wall finishes 10%

(f) the sewerage works serving the said Building 5%

(g) the drains serving the said Building 5%

(h) the roads serving the said Building 5%

3. On the date the Purchaser takes vacant possession of the said Parcel, with water and electricity supply ready for connection 12.5%

4. On the date the Purchaser takes vacant possession of the said Parcel as in item 3 2.5 and to held by the Vendor’s solicitors as stakeholder for payment to Vendor within 21 working days after the receipt by the Purchaser of the written confirmation of the Proprietor/Vendor’s submission to appropriate authority of the application for subdivision of the said Building or Land, as the case maybe

5. On the date the Purchaser takes vacant possession of the said Parcel as in 5 item 3 and to be held by the Vendor's solicitor as stakeholder for payment to the Vendor as follows:

(a) two point five percentum (2.5%) at the expiry of eight (8) months after the date the Purchaser takes vacant possession of the said Property;

(b) two point five percentum (2.5%) at the expiry of twenty-four (24) months after the date the Purchaser takes vacant possession of the said Building.

TOTAL 100 %

LAM CERTIFYING GUIDELINES

SCHEDULE G

LAM Guidelines on Certification of:

2. (a) the foundation of the said Building - (10%)

Required to be Completed for Certification
 All foundation works below the lowest floor level
 Pilings and pilecaps (if any)
 Raft slabs (if any)
 Footings (if any)
 Stumps (if any)

Not Required to be Completed for Certification
 Retaining wall if it is not part of the foundation
 Backfilling
 Lowest floor slab if it is not part of the foundation
 Ground beams
 Services

SCHEDULE H

LAM Guidelines on Certification of:

2. (a) the work below ground level of the said Building comprising the said Parcel including foundation of the said Building - (10%)

Required to be Completed for Certification
 All foundation works below the lowest floor level
 Pilings and pilecaps (if any)
 Raft slabs (if any)
 Footings (if any)
 Stumps (if any)
where applicable of the said building comprising the said Parcel.

Not Required to be Completed for Certification
 Retaining wall if it is not part of the foundation
 Backfilling
 Lowest floor slab if it is not part of the foundation
 Ground beams
 Services

2. (b) the structural framework of the said Building - (15%)

Required to be Completed for Certification
 All primary structural elements above lowest floor level including:
- Beams
- Columns
- Suspended Slabs
- Roof beams
- Structural walls (if any)

 Retaining walls forming part of the structural element to the Building (if any)
Note: Architect to wait until the said form works are removed to visually ensure that there are no major honeycomb/defects on the structure before certification.

Not Required to be Completed for Certification
 Non-structural ground floor slabs with or without BRC
 Wall stiffeners and lintols
 Non structural or supporting R.C. works e.g. hoods, aprons, gutters, parapet
 Staircase
 R.C. walls (that do not form part of the structural framework)

2. (b) the structural framework of the said Parcel - (15%)

Required to be Completed for Certification
 All primary structural elements above lowest floor level including:
- Beams,
Columns,
Suspended Slabs,
Roof beams,
Structural walls (if any)
where applicable of the said Parcel.

 Retaining walls forming part of the structural element to the Parcel (if any)
Note: Architect to wait until the side formworks are removed to visually ensure that there are no major honeycomb/defects on the structure before certification.

Not Required to be Completed for Certification
 Non-structural ground floor slabs with or without BRC
 Wall stiffeners and lintols
 Non structural or supporting R.C. works e.g. hoods, aprons, gutters, parapet
 Staircase including that in the common area
 R.C. walls (that do not form part of the structural framework)

2. (c) the walls of the said Building with door and window frames placed in position - (10%)

Required to be Completed for Certification
 All non structural walls
 All party walls inclusive of wall stiffeners
 Timber door and window frames where there are no subframes
 All frameworks for dry partitioning excluding lining of partition

Note: Architect to ensure that all openings are properly formed to receive the metal frames and completed with lintols (where applicable) before this is certified.

Not Required to be Completed for Certification
 Metal frames
 Installation of door leaves, window (fixed or openable) or louvres
 Parapet walls, boundary walls and fence walls
 Closing up of temporary openings left in walls for construction purposes
 Timber door and window frames where sub-frames are provided

Note: For non conventional framework, the developer should refer to the Ministry of Housing and Local Government for modification [Refer to Clause 11(3) of the Housing Development (Control and Licensing) Regulations 1989].

2. (c) the walls of the said Parcel with door and window frames placed in position - (10%)

Required to be Completed for Certification
 All non structural walls
 All party walls inclusive of wall stiffeners
 Timber door and window frames where there are no subframes
 All frameworks for dry partitioning excluding lining of partition

Note: Architect to ensure that all openings are properly formed to receive the metal frames and completed with lintols (where applicable) before this is certified.

Not Required to be Completed for Certification
 Metal frames
 Installation of door leaves, window (fixed or openable) or louvres
 Parapet walls, boundary walls and fence walls
 Closing up of temporary openings left in walls for construction purposes
 Timber door and window frames where sub-frames are provided

Note: For non conventional framework, the developer should refer to the Ministry of Housing and Local Government for modification [Refer to Clause 11(3) of the Housing Development (Control and Licensing)
Regulations 1989].

2. (d) the roofing, electrical wiring, plumbing (without fittings), gas piping (if any) and internal telephone trunking and cabling to the said Building - (10%)

Required to be Completed for Certification
 Roof framings, roof coverings and flashing including car porches
 All gas pipings (if any)
 All internal telephone trunkings and cablings
 All electrical wirings
 All water pipings including bends and joints
 All sanitary pipings including bends, joints and traps

Not Required to be Completed for Certification
 Ceiling boards or panels
 Switch boxes, socket outlets, switches and electrical fixtures and fittings (if any)
 Sanitary fittings including sinks, taps, basins, bathtubs and shower heads
 Hot water heaters
 Water tanks
 Rain water downpipes and gutters (if any)
 Window hoods

2. (d) the roofing, electrical wiring, plumbing (without fittings), gas piping (if any)
and internal telephone trunking and cabling to the said Parcel - (10%)

Required to be Completed for Certification
 Roof framings, roof coverings and flashing including car porches
 All gas pipings (if any)
 All internal telephone trunkings and cablings
 All electrical wirings
 All water pipings including bends and joints
 All sanitary pipings including bends, joints and traps

Not Required to be Completed for Certification
 Ceiling boards or panels
 Switch boxes, socket outlets, switches and electrical fixtures and fittings (if any)
 Sanitary fittings including sinks, taps, basins, bathtubs and shower heads
 Hot water heaters
 Water tanks
 Rain water downpipes and gutters (if any)
 Window hoods

2. (e) the internal and external finishes of the said Building including the wall finishes - (10%)

Required to be Completed for Certification
 All plastering or skim coatings where specified to all wall soffits of suspended slabs (if any), beams and columns
 Wall tiles and other wall finishes (if any)
 All linings/boards/panels to framed partitions and/or ceiling (if any)
 Floor screedings and/or other floor finishes
 Painting to internal and external walls, floors and ceilings (if any)

Not Required to be Completed for Certification
 Closing up of temporary openings for construction purposes
 Door and window panels

2. (e) the internal and external finishes of the said Parcel including the wall finishes - (10%)

Required to be Completed for Certification
 All plastering or skim coatings where specified to all wall soffits of suspended slabs (if any), beams and columns
 Wall tiles and other wall finishes (if any)
 All linings/boards/panels to framed partitions and/or ceiling (if any)
 Floor screedings and/or other floor finishes
 Painting to internal and external walls, floors and ceilings (if any)

Not Required to be Completed for Certification
 Closing up of temporary openings for construction purposes
 Door and window panels

2. (f) the sewerage works serving the said Building - (5%)

Required to be Completed for Certification
 Sewerage works including manholes from the Building connected to a completed sewerage treatment system (The treatment system may be permanent or temporary as approved by the relevant authority)

Not Required to be Completed for Certification
 Testing and commissioning water and electricity connection

2. (g) the drains serving the said Building - (5%)

Required to be Completed for Certification
 Drains and main drains connected to the outfall (The alignment of the drains and the outfall may be permanent or temporary as approved by the local authority)

Not Required to be Completed for Certification
 Metal gratings and covers over drains

2. (h) the roads serving the said Building - (5%)

Required to be Completed for Certification
 Paved road leading to the Building from an existing road. The alignment of the road may be a permanent or temporary access approved by the local authority.

 Permanent roads around the Building

 Entrance culvert serving the Building
 Kerbs (if any)

Not Required to be Completed for Certification
 Footpaths and roadside tables
 Final wearing course to pre-mixed roads
 Road markings and signages

2. (h) the roads serving the said Building - (5%)

Required to be Completed for Certification
 Paved road leading to the Building containing the said Parcel from an existing road. The alignment of the road may be a permanent or temporary access approved by the local authority.
 Permanent roads around the Building containing the said Parcel
 Entrance culvert serving the Building
 Kerbs (if any)

Not Required to be Completed for Certification
 Footpaths and roadside tables
 Final wearing course to pre-mixed roads
 Road markings and signages

3. On the date the Purchaser takes vacant possession of the said Building, with water and electricity supply ready for connection – (12.5%)

Required to be Completed for Certification
 All other works inclusive but not limited to all items not completed in Stage 2(a) to 2(h).
 External works including fencings, gates and turfing (if any)
 Electrical wirings, water and sanitary piping services completed and ready to receive supply

 Water and electricity supply available and ready for connection for tapping into the said building
 The TNB sub-station should be energised or alternative electricity supply by TNB is provided.
 All external electrical cablings from sub-station to the unit must be completed with supply.
 Sewerage treatment plant is operational
 Water reservoir (if applicable) is operational
 Closing up of temporary openings for construction purposes.

Not Required to be Completed for Certification
 Electrical, water, sanitary and other loose fittings and fixtures (consent /undertaking letter required).
 Minor defects
 Electrical and water meters

3. On the date the Purchaser takes vacant possession of the said Parcel, with water and electricity supply ready for connection – (12.5%)

Required to be Completed for Certification
 All other works inclusive but not limited to all items not completed in Stage 2(a) to 2(h).
 External works including fencings, gates and turfing (if any)
 Electrical wirings, water and sanitary piping services completed and ready to receive supply
 Water and electricity supply available and ready for connection for tapping into the said
Parcel
 The TNB sub-station should be energised or alternative electricity supply by TNB is
provided.
 All external electrical cablings from sub-station to the unit must be completed with supply.
 Sewerage treatment plant is operational
 Water reservoir (if applicable) is operational
 Closing up of temporary openings for construction purposes.

Not Required to be Completed for Certification
 Electrical, water, sanitary and other loose fittings and fixtures (consent /undertaking letter required).
 Minor defects
 Electrical and water meters

Rules on Certifications

Certificate of Completion and Compliance
Act 118 : Section 3.
Interpretation. In this Act, unless the context otherwise requires--

“certificate of completion and compliance” means the certificate of completion and compliance given or granted under the Street, Drainage and Building Act 1974 [Act 133] and any by-laws made under that Act certifying that the housing accommodation has been completed and is safe and fit for occupation but does not include partial certificate of completion and compliance;

Certification for Release of Money
Act 118 : Section 22E.
Release of moneys by a stakeholder.

(1) Any stakeholder who releases any money to a housing developer or to any other person knowing that such an act is contrary to the provisions of the sale and purchase agreement shall be guilty of an offence and shall, on conviction, be liable to a fine which shall not be less than ten thousand ringgit but which shall not exceed one hundred thousand ringgit or to imprisonment for a term not exceeding five years or to both.

(2) Any person who knowingly and wilfully aids, abets, counsels, procures or commands the commission of an offence against subsection (1) shall be liable to be punished with the punishment provided for the offence.

Certification for Progress Payment
Act 118 : Section 22F.
Progress certification.

(1) Any architect or engineer, as the case may be, who issues a progress certification knowing that the works therein referred to have not been completed in accordance with the provisions of the sale and purchase agreement shall be guilty of an offence and shall, on conviction, be liable to a fine which shall not be less than ten thousand ringgit but which shall not exceed one hundred thousand ringgit or to imprisonment for a term not exceeding five years or to both.

(2) Any person who knowingly and willfully aids, abets, counsels, procures or commands the commission of an offence under subsection (1) shall be liable to be punished with the punishment provided for the offence.

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