Before you spend big buying a property, check whether the property developer involved has ever had a problem in their project or is facing a problem involving the authorities. The National Housing Department (JPN) has blacklisted property developers in Malaysia and has recently released the latest list.
Developers on the blacklist are placed in four categories of offenses as follows:
1. Developer without a license
Under the Housing Development (Control and Licensing) Act 1966, property developers are required to apply for licenses and permits before commencing projects and selling to the public. Failure to do so is an offense under this Act. Typically, developers will display their licenses and permit numbers on their brochures and brochures as well as in sales galleries.
The following developers are among the unlicensed developers in the list that has been updated as of August 16, 2021:
- SPS Setia Sdn Bhd
- Lestari Puchong Sdn Bhd
- CT Bakti Timor Sdn Bhd
- Expand Factor Sdn Bhd
- Penta Heights Sdn Bhd
- Binalif Property & Development Sdn Bhd (Hyrax Property & Development S/B)
2. Developers involved with abandoned housing projects
There are many reasons why a project can be abandoned. Among them are inexperienced developers, weak marketing and sales strategies, financial problems, economic downturn, disputes between stakeholders, mismanagement of companies and business affairs by developers and negligence of authorities in monitoring and enforcement.
As of November 2017, a total of 253 abandoned private housing projects were recorded in Peninsular Malaysia. The majority of these projects are in Selangor.
As of October 20, 2020, there are 187 developers on the list of abandoned projects. This is a surprising number.
The two latest abandoned projects are Puncak Jalil (formerly known as Bandar Seri Bukit Jalil) by Maxisegar Sdn. Bhd. and Taman Setia Indah, Johor Bahru by YMN Properties Sdn. Bhd
Among the developers involved are:
- BSC Development Sdn. Bhd.
- Asian Lion Enterprise Sdn Bhd
- Sri Hartamas Corporation Sdn Bhd
- Evergreen Acres Sdn Bhd
- Bukit Tandak Development Sdn. Bhd
- Maymont Development Sdn Bhd
- Villa Genting Properties Sdn Bhd
Developers who default on the Home Buyers Claims Tribunal (TTPR) award
For those who don’t know, the Home Buyers Claims Tribunal (TTPR) provides an easy, immediate and economical way for home buyers to make housing -related claims from developers, such as workmanship defects and delays in handing over vacant ownership. The TTPR falls within the jurisdiction of the Ministry of Housing and Local Government (KPKT) and the final decision made by the Tribunal is called an award. After the award is given, the developer is responsible for paying compensation to the buyer.
• Abra Development Sdn Bhd
• Ban Soon Aik Development Sdn Bhd
• Diamond Crest Sdn Bhd
• Hartaplus Realty Sdn Bhd
• Lestari Puchong Sdn Bhd
• Sky Venture Management Sdn Bhd
• Wangsa Idaman Sdn Bhd
4. Developers who fail to pay the compound
Developers who break the law will be subject to excessive charges called compounds. The compound imposed is between RM5,000 to RM50,000 depending on the type of offense which is divided into three main clusters as below:
i. Compounding of offenses of licensed housing developer under sections 7 and 18 (c) of Act 118.
ii. Compounding of Advertising and Sales Permit offenses in accordance with regulation 5 of the Housing Development (Control and Licensing) Regulations 1989.
iii. Compounding of offenses of management and maintenance of Housing Development Account under the Housing Development Regulations (1A), 5 (6), 6 Housing Development Account) 1991.
As of October 30, 2020, there are 412 developers who have not yet paid their compound – this is an increase from 387 developers who failed to pay their TPPR as of September 4, 2020.
Among the developers are:
Ajumas Engineering Sdn Bhd
Crystal Amber Sdn Bhd
Fajar Melati Sdn Bhd
Idaman Ekspres Sdn Bhd
Macvilla Sdn Bhd
SOE Brothers Sdn Bhd
Top Impression Sdn Bhd
I have bought real estate from a developer on the blacklist. What should I do?
To answer this question, we contacted KPKT. Unfortunately, the response we received was not helpful. We were told by the KPKT representative, there is nothing KPKT can do. The buyer will need to appoint a lawyer and file a civil suit.
Without giving up, we contacted real estate lawyer Khairul Anuar Sharudin from Khairul, Suhaila & Hazlina to be sure. Apparently there is a way to deal with this problem that you can cancel your sales & purchase agreement (SPA)!
1. For licensed developers:
According to the amended Housing Development (Control and Licensing) Act 1996 (Act 118), homebuyers have the right to cancel their SPA if the housing project does not show any progress within six months after signing the contract. To implement it, the buyer must obtain approval from the Ministry and apply for written permission from the bank.
Another thing you need to know is that financiers cannot withhold permission to terminate this agreement without reasonable cause. Once this process is completed, the licensed developer concerned will have to repay the buyer’s money within 30 days without interest.
2. For developers without a license:
Former Deputy Minister of Housing and Local Government Halimah Mohamed Sadique in a media report once said buyers can file their claims to be heard at the TTPR, including problems faced by developers without a license under the same Act.
The lesson: Check before you buy!
There are many factors to consider in deciding on when and where to buy a home, but an easy first step is to check out the developer. As noted here, there are hundreds of developers who have been blacklisted.
It doesn’t matter whether it’s a developer company you meet at a shopping mall or a real estate expo, you need to do a developer credibility check with KPKT and look at the developer’s CTOS profile. This may sound a bit cliché but prevention is better than cure.
If you are looking for a home loan, use our home loan eligibility calculator to determine the property price range that fits your financial profile.
This article has been reworked from “Avoid Being Cheated by These BLACKLISTED Property Developers!” Which was first published on Loanstreet.com.my. | Edited by IVAN