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Misled By Property Ads? Homebuyers Have Six Years To Take Legal Action

Kuala lumpur: 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.

According to BERNAMA News Agency, lawyer Datuk J. Shamesh, who is also president of the Home Buyers Tribunal, emphasized that 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," he noted.

Shamesh elaborated that 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 might claim that the contract was induced by misrepresentation. He explained 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.

Further detailing legal provisions, Shamesh pointed out that 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 advised buyers to conduct due diligence before signing, which includes verifying the developer's licence, permits, track record, and ensuring consistency between marketing materials and approved plans.

Moreover, Shamesh emphasized the importance of ensuring all key promises are clearly documented in the SPA. He referenced the case of Toh Shu Hua and 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.

In conclusion, Shamesh advised that while brochures can sometimes be legally binding, buyers should not rely on them alone, emphasizing that the safest approach is to ensure all important promises and specifications are expressly included in the SPA.

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