I have paid a deposit to secure a unit in a commercial building development. I found out that the developer has not obtained the prerequisite developer’s licence or advertisement permit as required by the Housing Development (Control and Licensing) Act 1966 (“HDA 1966”). Can I issue a Letter of Demand insisting the developer refund my deposit payment?


Is it still busted if it is true?

Any development built as a commercial building will NOT fall under the purview of the HDA 1966, as the main purpose of the HDA 1966 is to regulate ‘housing developments’, not commercial developments. Notwithstanding that, it is not so straight forward with the prevailing trend of mixed use buildings these days.

Hence, if the purpose of a building is not fully or partially for human habitation, HDA 1966 will not apply. In another word, if the purpose of the building is intended to be used in any way as a dwelling, it will be regulated by the HDA 1966 of which the prescribed standard contract and the stake holding account as well as the advertising permit that you have mentioned will come into place. To prove the intention of the developer, just look at their promotional material to see if there is any element of “home” in it. Developers have been creative over the years to play with the words like Serviced Apartment, SOHO, SOVO (V for versatile) and SOFO (F for flexible). All of these will have different implications; prescribed land use in the land title has become secondary after the amended law in 2007 that has been discussed herein.

Your demand for the refund and the reason that you have proved can only be sustainable if the development is indeed one that is govern under the HDA. Otherwise, pure commercial development is largely regulated by the terms set freely through the documents executed by the parties. Thus your claim for refund is subject to the same.

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