Apartment owners' class-action lawsuit against The Arc @ Cyberjaya developer kicks off

SHAH ALAM: A class-action lawsuit involving 137 unit owners, who are seeking the return of outstanding rentals owed to them by Maju Puncakbumi Sdn Bhd, the developer of serviced apartment project named The Arc @ Cyberjaya kicked off at the Shah Alam High Court today.
The apartment owners’ claims against the developer include 8% interest on the outstanding rentals, agreed liquidated damages as stated in the agreement, general damages, and/or aggravated damages, as well as exemplary damages.
The Arc @ Cyberjaya is a RM700 million freehold development, which was launched in 2011, comprising four blocks of serviced apartments with at an average price of RM350,000 per unit and four blocks of office towers.
Incorporated in 2009, Maju Puncakbumi offers commercial and residential property development services. The company is based in Subang Jaya and operates as a subsidiary of Meda Inc Bhd.
Vincent Lim, the lawyer representing the owners, told SunBiz today the owners have applied for summary judgement to be granted by the court on the decision date, in order to avoid trial. Shah Alam High Court judge Datuk Roslan Abu Bakar has fixed Nov 2, 2017 as the decision date.
It was reported that the owners were given an option to sign up for a guaranteed rental return (GRR) scheme, which promised a fixed rental income for up to 25 years, when they signed the sale and purchase agreement.
The scheme, with an annual return rate of 8%, is offered in packages lasting six, 10 or 25 years.
Previously, the development project manager, Andaman Property Management Sdn Bhd (APM), said the scheme is offered to the buyers to ease their concerns about a possible slowdown and to reduce fears they may have on finding tenants or collecting rental payments.
Under GRR scheme, which is also known as a leaseback programme, the developer will be responsible for looking for tenants and managing the property for the buyers, with a guaranteed rental income for a predetermined period.
APM also said it believed it could afford to guarantee the gross rental rate due to its leasing agreement with Multimedia University to provide the apartments as hostels for its students for up to 25 years.
However, the owners claimed they have stopped receiving their rental after a year, from as far back as March last year.