Legislation To Protect House Buyers

Posted on 4:46 PM | By Smart Wealth Advisory | In

The Housing Developer Act (Control and License) 1966 (Act118) was enforced on Aug 29, 1969 while the Housing Developers Regulations came into force on April 1989. Both the act regulations are aimed at safeguards the interest of house buyers. However, such laws are only applicable in Peninsular Malaysia and do not cover housing development by cooperatives, government agencies and bodies, or commercial units such as hotels and business premises.

Monitoring and enforcement of the act is done by the Housing and Local Government Ministry's Monitoring and Enforcement Division Located on the fourth floor, Blok K, Pusat Bandar Damansara.


Monitoring and enforcement are handled by the housing Controller, Housing Inspector and Officers, who are appointed by the Housing and Local Government Minister.

The division conducts regular monitoring to ensure:

* Housing projects which have been given the Housing Developer's License by the housing controller are progressing as scheduled, without problems.

* Housing developer conform with the laws stipulated under the Act/Regulations such as possessing housing developer license and the conditions in the permit for advertising and sale; proper maintenance of the Housing Developer Account, standardization of the sale and purchase agreement in accordance with the sale and purchase agreement regulations as in Schedule G (land and building). These include bungalows, terrace houses and semi-detached units.

They also need to adhere to Schedule H (multi-unit buildings such as flats, apartments, condominium and town houses).

The monitoring of the projects are done through:

* Inspections and survey reports received from the housing developers. Under the Housing Developers Act (Control and Licensing) 1966, the developers must submit progress reports by filling form 7(F) to the Monitoring and Enforcement Division twice a year.

* Inspections at the project site, area and office. This covers various aspects such as advertising, progress of projects, payment and collections of monies by the housing developer, implementation of the sale and purchase agreements and other related matters. Developers are not allowed to amend, insert new clauses or cancel any part of the approval of the Housing Controller.

* Review of advertisements published by developers through newspapers, brochure, advertisement board and other channels to see whether they comply with the law.

* Monitoring of projects based on the information and complaints received from the public through letters, telephone calls, e-mail, whether published or aired in the mass media.

From the enforcement aspect, the Monitoring and Enforcement Division will take the necessary steps, including legal action, against the housing developers who flout the law. The violations can include proceeding with project without having obtained a valid license and necessary approvals violation of licensing conditions and failure to properly maintain their Housing Development Accounts.

Those who proceed with construction activities without a proper license can be fined RM100,000 or five years imprisonment or both. The same goes for housing developers who fail to open a Housing Development Account. For this offence, imprisonment is three years. For other offence, the housing developer can face up to RM10,000 fine or three years imprisonment or both depending on the rules they violate.

The Act also empowers the Minister to direct developers on matters related to save guarding the interest of house buyers.

The housing controller can also revoke or suspend the housing developer's license if he/she regards the offence as endangering the interest the house buyers or the public.
House buyers in the meantime are reminded to ensure that housing developers have the valid licenses and permits to advertise and sell.

They can seek information from the Monitoring and Enforcement Division by letter or e-mail to enforcement@kpkt.gov.my.

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