Great News for House Buyers: Abandonment of Housing Projects to be Deemed Criminal Offence

KUALA KUMPUR: All licensed housing developers who fail to complete a housing project or cause the abandonment of the project shall be deemed to have committed a criminal offence under the amendments to the Housing Development (Control and Licensing) Act 1966.

Upon conviction, such a developer is liable to a fine of not less than RM250,000 and not more than RM500,000, or to be jailed up to three years, or both.

This is provided under a new section in Clause 9 of the Housing Development (Control and Licensing) (Amendment) Bill 2011.

The new section is among several amendments made to the Housing Development (Control and Licensing) 1966 (Act 118), which will provide more protections and rights to house buyers and to prevent the occurrence of abandoned projects.

According to the bill, Clause 9 is aimed at inserting a new Section 18A into Act 118 to overcome abandoned projects and provide house buyers the rights to take legal action against errant developers.

This provision applies to all developers who refused to continue or have postponed or suspended or stopped the project for a period of six months or more, or surpassing the original scheduled date of completion as stated in the sale and purchase agreement.

The bill was read for the first time in the Dewan Rakyat Wednesday by Housing and Local Government Datuk Seri Chor Chee Heung. Once passed, it will be known as Housing Development (Control and Licensing) (Amendment) Act 2011.

Apart from that, Clause 5 in the bill, which is aimed at replacing Section 8A of Act 118, will also give the buyer the rights to terminate the sale and purchase agreement if the developer refused to continue implementing the project after six months from the date of the agreement.

Source: The Star