Legal Conflicts Between Landowners and Housing Developers in Housing Development Under A Joint Venture Agreement

Abstract

In the context of contemporary housing development, collaboration between landowners and developers has become a common practice in bringing projects to fruition. However, such relationships are not free from various issues and uncertainties, particularly when the responsibilities, rights, and risks of the parties involved are not clearly specified in the agreement. Joint venture agreements in Malaysia are generally not specifically structured to provide adequate legal protection to landowners. The research problem centres on uncertainties in determining the legal position and allocation of responsibilities between landowners and housing developers. Problems such as project delays and abandoned housing projects often expose landowners to various difficulties and crises, including the burden of responsibility for rehabilitating the projects. This article focuses on three aspects of conflict in the relationship between the landowners and housing developers, namely;(i) uncertainties in determining the existence of fiduciary duties and a partnership under a joint venture agreement;(ii) the risk of transferring liability based on the definition under Section 3 of the Housing Development (Control and Licensing) Act 1966 (Amendment 2013); and (iii) the implications of granting a power of attorney to the developer. This study aims to examine the legal position relating to these three aspects and to propose measures for addressing the issues that arise. Most previous studies have focused on the difficulties and obstacles faced by homebuyers when housing projects are abandoned, while the problems encountered by landowners have rarely been highlighted. This study is based on library research concerning the conflicts and dilemmas faced by landowners who are bound by joint venture agreements with housing developers. It also includes a literature review of court decisions and findings from peer-reviewed journals. Based on the study, the researcher that the relevant statutory provisions be reviewed and that the principle of limited partnership liability be incorporated into joint venture agreements for housing development. This measure is important strengthening the legal protection afforded to landowners and reducing their exposure to liability. The researcher further recommends that landowners be provided with appropriate information and consultation services by government agencies to ensure clarity of responsibilities, transparency, and effective liability management before the joint venture relationship is finalised. 

Keywords: Joint venture, partnership, fiduciary duty, housing developer, Act 1966 (Amendment 2015), power of attorney