What You Should Know About Abandoned Properties

Posted on: 2016-06-02

Ever come across an abandoned property? The picture below shows one at the Plaza Rakyat LRT station. The original plan was to build a 79-storey office tower, a 46-storey condominium, a 24-storey hotel and a 7-storey shopping centre but alas, the project has been left barren for the past 12 years.

That’s just one example. For the past 5 years, over 200 abandoned projects have been recorded by the Ministry of Urban Well being, Housing and Local Government. On top of hampering and disrupting the property market of the nation, these cases are shattering dreams of new shelter provisions.

How Do Home Buyers Suffer?

Owing to the sell then build system, developers build the property only after receiving cash inflow from buyers. The money paid to the developer comes from bank loans. If a project is abandoned by the developer, buyers will still have to continue forking out monthly commitments to the bank without a house to show for it.

Legal right you should know

In an effort to reduce the number of abandoned  projects, the government has amended the Housing Development ( Control and Licensing ) Act 1966 a few times. The latest amendment made on Section 8A of Housing Development ( Control and Licensing ) Act 2012, will provide protection to house buyers to terminate the Sales and Purchase Agreement under certain conditions.

Before the amendment, at least 75% of the buyers will have to agree to terminate the S&P Agreement within 6 months from first the S&P execution. If the period exceeds 6 months OR if less than 75% of buyers step out to cancel the purchase, their S&P cannot be terminated, which means buyers will have to pay their installments until their debt is cleared!

Also, before the amendment, the decision on approval or rejection of termination of the S&P agreement by the Minister is final. So if the Minister disapproves the termination of S&P, the purchaser will have to continue to pay his/her debt.

Some highlights of the amendments (to be enforced June 2015 onwards) are:

  • If the developer has failed to run its construction continuously for 6 months from commencement of S&P Agreement and the failure is confirmed by the Controller, the S&P can be terminated after the buyer received written consent from banks. The financier should not unreasonably withhold the consent to terminate the agreement.
  • In the event that the purchaser exercises his rights to terminate the S&P, the licensed housing developer should refund all monies received within 30 days (interest free)
  • Termination of S&P does not have to be subjected to Minister’s decision


In order to protect yourself from losing your hard earned money into abandoned projects, you should:

  • Make sure of the credibility of the developer. Ask your lawyer to have a background search on the developer and their CTOS profile. Many may think that since a developer can run a project, they must be legal and that the projects are approved by authorities. However, this might not be true. Without proper research, your money can end up with one of the 82 illegal and unlicensed developers in Malaysia.
  • Check if the housing developer is blacklisted by the Ministry of Urban Wellbeing, Housing and Local Government.


Source From: LoanStreet

Other News & Articles

Home Buying For Newlyweds

Newly married couples usually dream of purchasing a home together. In fact, buying a home may often be a first-time experience for both husband and wife and one of the most expensive purchases a new couple will ever make....

Posted on: 2021-09-02

Rakyat Malaysia Ubah Suai Kediaman Penuhi Keperluan Bekerja

Banyak pihak menyedari kepentingan memiliki ruang peribadi sendiri, terutama bagi mereka yang bekerja secara jarak jauh...

Posted on: 2021-09-02

Permintaan Hartanah Sekunder Semakin Meningkat

Nilai permohonan pinjaman perumahan meningkat 86 peratus dari Januari hingga Jun tahun ini...

Posted on: 2021-09-02