Misled by property ads? Homebuyers have six years to take legal action
Under Section 18 of the Contracts Act 1950, misrepresentation includes a positive assertion of fact that is untrue and which induces a buyer to enter into a contract.
KUALA LUMPUR - Misleading property advertisements? What homebuyers need to know.
Homebuyers who discover discrepancies between their purchased property and what was advertised in brochures, websites, or promotional materials have up to six years to pursue legal action for misrepresentation or breach of contract, a legal expert said.
Lawyer Datuk J. Shamesh, who is also president of the Home Buyers Tribunal said failure to act within the stipulated timeline could bar their claims.
"Buyers generally have six years to bring a breach of contract claim under the Limitation Act 1953 and should seek legal advice promptly once discrepancies are identified.
"If a buyer relied on statements in marketing materials when signing the sale and purchase agreement (SPA), and those statements later turned out to be false or inaccurate, the buyer may claim that the contract was induced by misrepresentation," he said.
Shamesh added that under Section 18 of the Contracts Act 1950, misrepresentation includes a positive assertion of fact that is untrue and which induces a buyer to enter into a contract.
"Section 19 of the same Act allows a contract induced by misrepresentation to be voided at the option of the misled party, with remedies including rescission or damages, depending on the circumstances,” he said.
He also urged buyers to conduct due diligence before signing, including verifying the developer’s licence, permits, track record and consistency between marketing materials and approved plans.
Most importantly, Shamesh said, buyers should ensure all key promises are clearly documented in the SPA.
He cited the case of Toh Shu Hua & Ors v Wawasan Rajawali Sdn Bhd (2023)2 CLJ 310, where 122 apartment buyers successfully sued a developer for misrepresentation.
The High Court held that the brochure was not mere marketing hype and awarded RM50,000 in damages to each buyer, as well as RM2 million in aggravated damages to be shared among them.
Shamesh also said that while brochures can sometimes be legally binding, buyers should not rely on them alone, as the safest approach is to ensure that all important promises and specifications are expressly included in the SPA. - BERNAMA
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