It is well entrenched that the application of the statutory standard sale and purchase agreement (Schedules G, H, I and J) as provided in the Housing Development (Control and Licensing) Regulations 1989, is mandatory for all house purchases in Peninsular Malaysia pursuant to regulation 11(1) and (1A) of the Housing Development (Control and Licensing) Regulations 1989 and the principles decided in Rasiah Munusamy v. Lim Tan & Sons Sdn. Bhd, SEA Housing Corporation Sdn. Bhd v. Lee Poh Choo, Kimlin Housing Development Sdn. Bhd. (Appointed Receiver and Manager) (In Liquidation) v. Bank Bumiputra (M) Bhd. & Ors and MK Retnam Holdings Sdn. Bhd v. Bhagat Singh.
It is opined that the said agreement (Schedules, G, H, I and J) and its natures, arguably, is acceptable to Islamic law although there is no specific supporting permission/authority in Islamic Law (for example through the primary legal texts, ijma’, qiyas (analogy), istihsan (juristic preference), istidlal, and sad’ zarai’i, provided there will be no occurrence of gharar (fraud/risk/peril/uncertainty) or no possibility (ihtimal) of any commission and occurrence of gharar especially gharar al-fahish (exorbitant risk/peril/fraud/uncertainty).
The justification for the application of the said agreement is solely based on the ground of equity, customs and istihsan and to hinder hardship in business transaction, as well as for complying the maqasid al-shariah – being the objectives of the Shariah (specifically in the protection of wealth) and in the name of public interest (maslahah ammah and maslahah mursalah).
However it is opined, the said agreement can be recognized by Islamic Law by way of istihsan – not the primary texts, may not altogether be acceptable (i.e the said agreement may not be valid according to Islamic Law) in the event, the said agreement does not provide sufficient protection to purchasers against abandonment of housing project and the consequential losses. The reason is – in abandoned housing projects, the subject-matter (the duly completed housing unit with Certificate of Fitness for Occupation (CF) or Certificate of Completion and Compliance (CCC) obtained) does not exist both at the time of signing the agreement and after the expiry of the promised date for completion and for the delivery of the unit purchased. Thus, the element of gharar (risk/fraud/peril) exists, the very element that is not acceptable (void) to Islamic law (according to the majority of the jurists, as the rukun (pillars) and the conditions (syarat) of the contract have not been fulfilled) insofar as contract (aqd) is concerned.
It is opined, in abandoned housing projects, the absence of the subject-matter (the duly completed housing unit with CF or CCC) and the losses suffered by purchasers as the resultant consequences of the abandonment, becomes gharar al-fahish (exorbitant risk). To be acceptable in Islamic law the element of gharar (fraud/risk) must be absence or at least, there is only gharar al-yasir (immaterial risk) such as minor, but not major, defective works. Whether there is minor or major defective work in the completed constructed building or the purported project had altogether been left incomplete and abandoned, is dependent on the facts of the case, it is opined, and subject to the evaluation and certification of the building experts (such as the Ministry of Housing and Local Government’s (MOH) officers, building engineers, contractors and professional builders). However, according to al-Shatibi, the law in many cases does not provide what is to be considered as an exorbitant gharar (gharar al-fahish) and what is an insignificant gharar (gharar al-yasir). What has been done by the jurists is to compare between what was prohibited by direct provisions of the texts and what was not insignificant gharar is the one which the people feel at ease with, no dispute will arise from it and people are very much in need of such a contract (Ahmad Hidayat Buang, 2000, p. 175) and (Razali Nawawi, 2008, p. 52). In addition to this, according to Article 1199 of the Mejelle that things are excessive damage (dharar fahish) which damage a building, that is to say, which weaken it and become the cause of its falling down or which interfere with the essential requirements, that is to say, the original benefit which is expected from the building, like dwelling in it (Tyser, Demetriades & Effendi, The Mejelle, n.d, p. 195). It is opined, when housing project abandoned, it has caused excessive damage (dharar fahish) to purchasers as the purported purchased unit could not be occupied on time and purchasers have to suffer other kinds of losses, pecuniary or non-pecuniary (Niazi, 1988).
Alternatively, even though the present system of housing delivery and the said agreement (Schedules G, H, I and J) applicable in Peninsular Malaysia, it is opined, contain gharar al-fahish elements which can affect the legality of such an agreement according to Islamic Law, the said gharar can be tolerated, i.e it can be considered being or can be transformed into an significant or minor gharar (gharar al-yasir) not amounting to the nullity of the agreement, if there are systematic and concrete provisions for undertaking effective rehabilitation protecting the rights of purchasers or if there is certain preventive and curative measures which are fully able to protect the interests of purchasers and provide sufficient remedies to aggrieved purchasers or that the current system of housing delivery applies the ‘full build then sell’ system.