License And Permit To Safeguards Interests Of Buyers

Housing developers in Peninsular Malaysia are regulated under the housing developers Act (Control and Licensing) 1996 and housing developer Regulations (Control and Licensing) 1989.
The Housing and Local Government Ministry has been entrusted with the tusk of enforcing these laws to safeguard the interests of house buyers.
Under the act/regulations, it is compulsory for housing developer building and selling more than four unit of houses to obtain the licence to build and permits to advertise and sell those houses.
However,only private developer are require to adhere to such regulations. Government-backed companies such as the respective State economic Development Corporations and cooperatives are exempted from the ruling. These agencies have their own mechanisms to save guards the interests of their house buyers.
Housing developers are also exempted on the following conditions:

  • When they built fewer than four units of houses,
  • They built more than four units but the units are not for sale;
  • They sell the houses only after a full certificate of fitness has been issued(to encourage the built- and-sell concept).
In line with this, the ministry will only issue licenses and permits for advertising and sale to developers who have proven to be credible and capable of completing their projects
Several criteria must be met before this Ministry issues licenses and permits. These are :
  • The land title has been transferred to the housing developer;
  • Approval for new demarcations has been given for the land marked for development;
  • Building plan has been approved by the local authority concerned, and
  • The developer has enough capital to complete the project.
These conditions have been set to save guards the interest of houses buyers.
In addition to such measure, since1991, the ministry has made it compulsory for all housing developers to open an account with the bank or financial institutions specifically for each project.
This is to ensure the money collected from house buyers are properly managed and not used for other purposes. According to the regulation, all monies collected from buyers and withdrawal of that money from the bank and financial institutions will be controlled by the respective banks and financial institutions.
To ensure the move is effective and beneficial to house buyers, the ministry will allow a housing developer to close his account after the project has been completed and separate titles have been issued.
The ministry has also imposed conditions for housing developer to provide relevant information on their advertising and sale permits. Such information include;
  • License number of housing developer;
  • Advertising and sale permit number;
  • Name and address of housing developer;
  • Tenure of the land and encumbrances, if any, to which the land is subjected
  • Description of the house
  • Name of the housing project;
  • When the project is scheduled to be completed;
  • Price for each type of house;
  • The number of units built for sale
  • Name of the local authority that approved the building plan and the reference number.
All this information is vital in giving the potential house buyers a clearer picture of the development. House buyers who have any doubt on the developer or advertisement can consult the Licensing and Advisory Service Division. Ministry of Housing and Local Government or call 03-274033 or fax 03-2523214. They can also e-mail hashim@kpkt.gov.my or visit the ministry homepage http://www.kpkt.gov.my/contact. With such information available, house buyers are advised to ensure that the respective private housing developers have the valid license and advertising and sale permits before purchasing a house. The information can be verified against the advertisement in brochures, the various media and billboards. These brochures are also available, free of charge, from housing developers.


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