The Housing and Local Government Ministry has been urged to strictly enforce laws against developers responsible for abandoned housing projects, following criticism from the National House Buyers Association (HBA).
HBA Secretary-General Datuk Chang Kim Loong expressed concern over the lack of prosecution under Section 18A of the Housing Development (Control and Licensing) Act 1966, revised in 2015. The law stipulates that any licensed housing developer who abandons a project is guilty of an offence, facing fines of at least RM250,000, imprisonment up to three years, or both.
“Despite the revised Act being in force for nine years, no developer of abandoned housing projects has been prosecuted. With so many abandoned projects, why hasn’t any errant developer been punished or even prosecuted?” Chang questioned.
Chang emphasized that enforcement is crucial to the effectiveness of the law, which aims to protect property buyers. He lamented that not a single prosecution has been reported in the media involving developers of abandoned projects.
“Even the best legislation is merely ornamental without strict enforcement. This is essential to instill respect for the law and the fear it should command. As the guardian of the legislation, how does the ministry account for the growing number of problematic housing projects?” Chang asked.
He highlighted the traumatic impact on buyers who invest their savings in housing projects only to see them abandoned, yet still needing to service their bank loans. As of two years ago, Peninsular Malaysia recorded 198 abandoned housing projects, with some dating back to 1997 and others more recently declared abandoned.
Chang noted that these figures exclude government or agency-led projects that have also been abandoned or classified as “sick or delayed.” In February 2023, theSun reported that Minister Nga Kor Ming disclosed 429 “sick” housing projects involving 70,727 units and affecting 29,147 buyers nationwide as of January 31. “Sick” projects are those delayed by over 30% of their scheduled progress or where sales and purchase agreements have lapsed.
Chang described the situation as a widespread national issue, criticizing the lack of action against errant developers. “It is unfair and unacceptable for victims to suffer while developers escape punishment. Malaysians pride themselves on having a caring government, but enforcement agencies often let the public down,” he said.
theSun has reached out to Minister Nga Kor Ming for comment but has yet to receive a response.