RM10.56mil Princess Cove ruling puts developers on notice

In a significant ruling for purchasers and developers alike, a High Court in Johor Baru has ordered a condominium developer to pay RM10.56 million in compensation to 84 property buyers. The case revolves around the developer's decision to split the initial phase of the Princess Cove waterfront development into two, causing delays in delivery and the completion of common facilities for buyers.

The court ruled that the original Phase One completion date in November 2018 should determine the compensation period, rather than the October 2017 key handover. Successful claimants were awarded liquidated ascertained damages (LAD) for delays, and refunds for maintenance fees, sinking fund contributions, and water deposits collected prior to November 8, 2018.

However, 39 units were excluded from the compensation due to the purchasers having signed their sale and purchase agreements after the building plans were amended, resulting in a legal costs order of RM10,000 per unit. Property expert Samuel Tan emphasized the significance of the decision, stating that it clarifies developers cannot unilaterally alter project timelines and delivery arrangements after signing the contract.

The ruling also underscores that developers must honor their delivery obligations, including the completion of common facilities such as access roads, lifts, and essential infrastructure, as these aspects contribute to the overall livability and investment value of the property. Buyers are advised to carefully review project masterplan revisions and construction progress before signing the Sales and Purchase Agreement.

The decision may have broader implications for developers and buyers involved in large, phased developments, although the final legal impact will depend on any potential appeals.