You would probably have seen or passed by abandoned housing development projects along your journey in Malaysia cities. Or worst still, you could probably be one of the unit owners of the housing development.

This happens when housing developers ceased to continue with the development project. Did you know that when housing developers abandons their housing development projects, they are committing a crime?

Under Section 18A of the Housing Development (Control & Licensing) Act 1966 (“HDA”), a housing developer who refused to continue or have postponed or suspended or stopped the projects for a period of 6 months or more can be guilty of an offence which carries the punishment of a fine of between RM250,000 to RM500,000 or imprisonment for up to 3 years or both.

Where a housing development project is ceased for more than 6 months, this would mean that the affected purchasers would not be able to receive their property within the completion date or will never receive their property at all. In such circumstances, what can purchasers do?

An affected purchaser has the right to terminate the sale and purchase agreement (“SPA”) entered with the housing developer pursuant to Section 8A(1)(a) of the HDA. However, 2 things must be obtained prior to the termination – (a) written consent from the end financier and (b) certification from the Housing Controller that the housing developer has refused to carry out the housing development work for 6 consecutive months after the signing of the SPA. Upon termination of the sale and purchase agreement, the housing developers must refund all monies received from the affected purchasers within 30 days from the termination.

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Contents in this article are intended to provide a summary or review of the subject matter and are not intended to be nor should it be relied upon as a substitution for legal or any professional advice. For more information, contact us at hhqkl@hhq.com.my or +603 2710 3818.

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