The Housing Development Act 1966 was amended and came into effect on 1 December 2002

which aim to strengthen the protection on the purchasers of new residential properties.1
The most significant amendment is the action of abandonment housing projects will be
subjected to a criminal penalty.2 Under s.18A of the act,3 any developers and directors who
abandon their housing projects will be jailed not exceeding 3 years or fined not less than RM
250 000 and not exceed RM 500 000 or both. Therefore, all licensed housing developers who
had caused the abandonment of the housing project or fail to commence the housing project
shall be deemed to commit a criminal offence.4
The amendment act also clarify the definition of housing accommodation and housing
development under s.3.5 Both definitions cover regulating business of constructing more than
four units of housing accommodation on a land. The type of accommodation may prescribed
by Minister from time to time and cannot be questioned by any court under new section 3A.
Therefore, the Minister has the power to decide which development projects are fall within
the ambit of the Act. This amendment has widen the definition and scope of development
projects in order to prevent developers to avoid their responsibility from the ambiguous
definition. 6
For the purpose to minimize the risk of granting a license to a developer who is with a bad
track record in the housing development industry, the amount of deposit for housing
developers license is required according 3% of the development project cost. 7 This is also
ensure the financial stability of the developer when involved in the industry.8 In addition, S.79
was also amended and the progress reports need to be submitted to the controller not later
1 Wai Meng Chan, Delay in the completion of a new residential property: Rights of the
purchaser 1 Malayan Law Journal Articles
2 Nuarrual Hilal Md Dahlan, Issues of Khiyar (option) in Housing Agreements in Peninsular
Malaysia 1 Malayan Law Journal Articles
3 Housing Development (Control and Licensing)Act 1966
4 Dahlan
5 Housing Development (Control and Licensing)Act 1966
6 Anne Wong, Property: Amendments to the Housing Development Act- An Answered
Prayer Perhaps 1
7 Crowe Horwath, Abandoning Property Development Projects is now a Crime! (2012)
8 Ibid
9 Housing Development (Control and Licensing)Act 1966

than the 21st day of January and July of each year by developer. The written progress reports
are required until the CCC was issued. Developers also have an additional statutory duty to
inform the controller of any refusal in the issuance of CCC. Therefore, the controller is
manage to handle the information on the progress of the housing development which the
housing developer is engaged in.
Before amendment, s.7A of the Act 1966 can be abused by the developers where bank
managers, engineers, architects withdraw the available money in the end financiers hands at
the expense of the purchasers.10 After the amendment, the penalty for non-compliance has
been increased as the minimum fine is increased from RM50, 000 to RM250, 000. New
section 7C was added and give right to controller to freeze the housing development account
when he has reason to believe that a licensed housing developer is carrying on his business in
a manner detrimental to the interest of the purchaser or contravene any provision of this act.
The amendment also solve the problem for the mutual termination of the contract if the
development of said project has not commenced six months after the execution of the
contract.11 After amendment, not only a licensed housing developer can apply to the Minister
for approval to terminate all the sale and purchase agreements, purchasers also have this
rights under s.8A. Although the amendment does not mention whether the purchaser can
claim back the money from developer, this issue has been addressed in Thomas a/l
Iruthayam and Anor v LSSC Development Sdn Bhd. 12 The courts recognize the right of
purchaser to terminate the contract and entitled to claim for the full refund. Therefore,
purchaser and developer may enforce this right if such application is received by the Minister
within 6 months after the execution of the first SAP agreement and get at least 75%
purchasers consent in writing. S.8A (11) also increase the amount of fine from not
exceeding rm50 000 to shall not less than RM50 000 but which shall not exceed RM250
000 for not compliance with the provision of this section.
Previously, the purchaser had no right to sue the developer on the contract of sale under the
act.13 However, the effect of latest amendment of s.16N, the jurisdiction of the Tribunal of
Homebuyer (purchaser) may hear the claim but limited to a claim that is based on a cause of
10 Chan
11 Ibid
12 Thomas a/l Iruthayam and Anor v LSSC Development Sdn Bhd [2005] 4 MLJ 262
13 Chan

action arising from the contract of sale between purchaser and developer which is not later
than 12 months from the date of issuance of the certificate of completion and compliance
(CCC); the expiry date of the defects liability period as set out in SPA agreement; or the date
of termination of the SAP agreement by either party before the date of issuance of the CCC. 14
However, the right of subsequent purchaser is remain defeated if he did not have a direct
contract with the developer.15 This can be seen in a Federal Court case Westcourt Cory Sdn
Bhd v Tribunal Tuntutan Pembeli Rumah 16 stated the subsequent purchaser has locus
standi to lodge his claim against the developer provided he has entered into a SAP agreement
with the developer and not only with the original purchaser.
Due to the right to take action, amended s.22C has made purchasers easier to pledge actions
against the developer.17 If the purchaser wishes to pledge action, he need to notify his
financier under a deed of absolute assignment in writing either before or within 14 days after
the action is filed. This provision also has a retrospective effect.18
The new section 22D states that an assignment of a property from the purchaser to a new
buyer shall serve with a notice of assignment unto the developer and it will have a full effect
in law to pass and transfer the proprietary right, interest, chose in action and all legal and
other remedies.19 The consent of the developer is no longer required for the absolute
assignment of rights or interests in a housing accommodation.20 S.22 (D) (4) requires
purchaser or their respective solicitors request for necessary confirmation from the developer
with a payment of a fee not exceed RM50 for each request. This provision now also requires
purchaser seeks the confirmation and this change the normal practice where it is vendors
duty to apply for the developers consent and pay for that. 21 Any person who requires consent
from the developer to any absolute assignment shall be guilty of an offence. This section also
14 Housing Development (Control and Licensing)Act 1966
15 Chan
16 Westcourt Cory Sdn Bhd v Tribunal Tuntutan Pembeli Rumah [2006] 1 MLJ 339. Federal
Court
17 Wong
18 Ibid
19 Ibid
20 Majlis Peguam Bar Council Malaysia, Q & A on Housing Development (Control and
Licensing)(Amendment) Act 2007 (2007)
21 Ibid

prohibit any developer requires any consent to any absolute assignment, imposes any
condition, refuses to provide any confirmation or imposes any other fee which is not
permitted under this section.22 Therefore, this new section is seem to stop deceitful developers
from imposing unnecessary conditions and unreasonable administrative charges.

Thomas a/l Iruthayam and Anor v LSSC Development Sdn Bhd [2005] 4 MLJ 262
Westcourt Cory Sdn Bhd v Tribunal Tuntutan Pembeli Rumah [2006] 1 MLJ 339. (Federal
Court)
Chan WM, Delay in the completion of a new residential property: Rights of the purchaser 1
Malayan Law Journal Articles
Dahlan NHM, Issues of Khiyar (option) in Housing Agreements in Peninsular Malaysia 1
Malayan Law Journal Articles
Wong A, Property: Amendments to the Housing Development Act- An Answered Prayer
Perhaps 1
Horwath C, Abandoning Property Development Projects is now a Crime! (2012)
Malaysia MPBC, Q & A on Housing Development (Control and Licensing)(Amendment) Act
2007 (2007)
Housing Development (Control and Licensing)Act 1966

22 Housing Development (Control and Licensing)Act 1966