An abandoned housing project is a serious issue which cannot be ignored in Malaysia. Based on the official statistics, there were 216 private housing projects certified to be abandoned for the period between year 2009 and 31 January 2015. As such, the government has amended the existing laws to improve the legal aspects to enable the National Housing Department and the Ministry of Urban Wellbeing, Housing and Local Government to take more aggressive action against irresponsible developers and to protect house buyers from being victims of abandoned projects.
The Housing Development (Control and Licensing) Act 1966 ("Act 118") which provides for the control and licensing of the business of housing development in Peninsular Malaysia and the protection of the interest of the purchasers has been in force since 29 August 1969 and this Act has gone through 5 times of amendments in which the last amendment was made on 12 April 2007.
The Housing Development (Control and Licensing) (Amendment) Act 2012 ("Act 1415") which was gazetted on 9 February 2012 came into operation on 1 June 2015. Even though the Amendment Act was gazetted in 2012, it was not enforced earlier as the Act needed to be enforced together with the Strata Management Act 2013 and Strata Titles Act (Amendment) 2013.
The amendments to Act 118 involved 8 existing provisions, 1 new provision and the abolition of 1 provision, as follows:-
Amendment of section 3 where the interpretation of a 'housing developer' has been extended to include a person or body appointed by a court of competent jurisdiction to be the provisional liquidator or liquidator for the housing developer in a case where the housing developer is under liquidation.
Let's take a common scenario in the housing development industry: A housing developer company was wound up and the court had appointed a liquidator to take over the affairs of the company. The liquidator then called for a Purchasers Verification exercise and charged 2% of the purchase price as administrative fee in transferring the separate title / strata title to the house buyers; or when the current house buyer wanted to sell his property to another party pending issuance of the separate title / strata title, the liquidator imposed an administrative fee (range between a certain sum to 3% of the purchase price) on the house buyer for a written confirmation of the record of the beneficial owner of the property in the housing development and consent for the...