Modifications to Hire Purchase Act 1967 and Housing Development (Control and Licensing) Act 1966: Protection to Purchaser and Financial Institutions Interests During Covid-19 in Malaysia

Abstract

In containing the spread of Covid-19, the Malaysian government has imposed the Movement Control Order (MCO) starting from March 2020, which led to a halt in the progress of several sectors, including the hire purchase and housing development sectors. Realising several parties' financial and legal implications due to the MCO, the government has recently enacted new legislation as a temporary measure to curb the issue. The new Covid-19 Act received two-edged feedback from the society as some claimed that the Act is just too late, and the others argued on its efficiency to help the consumers due to its lack of clarity. Thus, the question that this paper seeks to resolve is whether the new Act does protect the interest of the parties involved? To answer this, this paper analyses the modifications made to the existing Hire Purchase Act 1967 and Housing Development (Control and Licensing) Act 1966 by discussing four sub issues, namely (i) whether the relief given in section 23 forms unfair leniency against the owners, (ii) whether section 24 of Covid-19 Act is a necessary clause (iii) whether the Act protects the interest of the housing developers and purchasers because of the existence of Section 37 and (iv) whether the lack of the consequences in the event of contravention and guidelines for application limit the Act's effectiveness. Literature review methodology is applied to identify the gaps in the modification to the existing law by studying publications and news articles on the matter. By the end of the study, this paper finds that the Covid-19 Act does have the provisions intended to protect consumers but with the absence of specific provisions covering financial institutions. The saving clauses in the said modifications are found to be highly questionable and calls for analysis and amendment. This paper finds critical points within the Covid-19 Act, such as the need to study and amend the saving clauses and improving the clarity and exactness of the provisions.