COMMENT The immediate response by former urban well being, housing and local government minister Abdul Rahman Dahlan giving his purported rationale for the granting of extension of time (EOT) in his press statement dated March 3, 2017, is irrational.

That the reason for the granting of an EOT is to ensure that housing developers complete their project does not hold water, because house buyers have no right to pursue liquidated damages (LAD) until and unless the houses have been completed and handed over. The question of LAD does not even arise unless the houses are completed and vacant possession delivered.

This is clearly stated in Clause 25(3) of the Schedule H statutory sale & purchase agreement (Schedule G has a similar provision). It reads inter alia: “For the avoidance of doubt, any cause of action to claim for liquidated damages by the purchaser under this clause shall accrue on the date the purchaser take vacant possession of the said parcel”.

The effect of an EOT is that the developers do not have to pay compensation or LAD to the house buyers after the project is completed and vacant possession delivered. Clearly, the only reason for granting an EOT is to save money for the developers.

Businessmen must be able to accept the risks of doing business and not seek the government’s protection to ensure they continue to make money or do not lose money. And the government must not try to save money for the developers at the expense of the naive and innocent buyers.

Helping developers save money?

By issuing the EOT the minister is effectively allowing the developers to save or keep the money which should have been paid to the house buyers. The minister is effectively taking away money belonging to the house buyers.

Has our country now reached a state of economic crisis that the minister must dish out EOTs to developers who are already in distress (due to bad management) and threatened to abandon their projects? Does it mean the minister will grant extension to every high-end project that asks for extension so that high-end buyers do not lose big money?...