Avoid these Malaysian property developers on the blacklist

Purchasing or investing in real estate requires a substantial sum of money. Therefore, being exploited and deceived by blacklisted developers is the last thing any of us expected. As a result, it is important not to get too excited when property developers give you offers that appear too good to be true. They could be among the blacklisted real estate developers.

If you are looking for your dream home, this is your useful guide to prevent being duped by unscrupulous developers. And, if you purchased a property from one of the developers on the blacklist, there is a solution for you as well. So keep reading.

Before buying a house, research the developer’s track record

Check to see whether the developer has had any issues with their previous projects before making a purchase. According to the Housing Development (Control and Licensing) Act of 1966 [Act 118], the National Housing Department (JPN) has produced the most recent list of blacklisted property developers (as of August 2023).

This blacklist is separated into four categories, which are as follows:

1) Property Developers Without Licenses

Before beginning project development and selling it to the public in Malaysia, a property developer must obtain a license and permit. Failure to comply is a violation of the Housing Development (Control and Licensing) Act. The developer’s license and permit number are usually displayed on their leaflet, brochure, or in their sales gallery.

Here’s an excerpt from the list:

• SPS Setia Sdn. Bhd.
• Syahira Development Sdn. Bhd.
• Sinar Fadzilat Sdn. Bhd. / Lurah Pantas Sdn. Bhd.
• SL Works Force Development Sdn. Bhd.
• Andaman Timor Sdn. Bhd.
• Cosmic Master Sdn. Bhd.

Want to read the full list? Click here: List of Unlicensed Housing Developers (as of 31st May 2023)

2) Property Developers with Abandoned Projects

There are numerous reasons why a project may be abandoned. It could be due to inexperienced developers, poor marketing and sales tactics, financial issues, difficult economic conditions, shareholder disputes, mismanagement of the firm and business operations, or even a lack of enforcement and monitoring by the authorities.

As reported by the Ministry of Housing and Local Government, a total of 79 private housing projects comprising 17,724 housing units and involving 11,824 buyers (worth RM5.57 billion) was confirmed to have been abandoned in Peninsular Malaysia in 2021 alone.

Here’s an excerpt from the list:

• Coral Land Corporation Sdn.Bhd.
• Edaran Shahida Sdn.Bhd.
• Haji Embong Sdn.Bhd.
• Juta Permai (M) Sdn.Bhd
• Luxstar Housing Development Sdn. Bhd
• Rui Development Sdn. Bhd.

Want to read the full list? Click here: List of Property Developers with Abandoned Projects (as of 31st May 2023)

3) Property Developers That Didn’t Honour Tribunal for Homebuyer Claims (TTPR) Award

For those who are unaware, the Tribunal for Homebuyer Claims provides an easier, cheaper, and faster means of resolving disputes with property developers, such as late delivery of vacant possession. This is excellent for protecting your rights as a buyer. Check out this FAQ from Kementerian Pembangunan Kerajaan Tempatan (KPKT) to learn more.

Here’s an excerpt from the list:

• ABRA DEVELOPMENT SDN BHD
• BISTARI LAND SDN BHD( REDEZ PROPERTIES )
• KS PROPERTY SDN BHD
• MACVILLA SDN BHD
• PERUDA DEVELOPMENT SDN BHD
• THIRTY THREE DEVELOPMENT SDN BHD

Want to read the full list? Click here: Property Developers That Didn’t Honour Tribunal for Homebuyer Claims (TTPR) Award (as of 18th August 2023)

4) Property Developers Who Failed to Settle Compound Payment

Property developers will be compounded between RM5,000 to RM50,000 based on the offenses made. These are divided into three main clusters as below:

1. Compounding of the offence of the licensed housing developer under sections 7 and 18 (c) of Act 118.
2. Compounding of Advertising and Sales Permits in compliance with regulation 5 (Housing Development (Control and Licensing) Regulations 1989.
3. Compounding of the management and maintenance offenses of the Housing Development Account (HDA) under the Housing Development Regulations (1A), 5 (6), 6 Housing Development Account) 1991.

Here’s an excerpt from the list:

• AUSTRAL DEVELOPMENT SDN BHD
• DINDING DEVELOPMENT SDN BHD
• GLOTRACO SDN BH
• KELLAND DEVELOPMENT SDN BHD
• MEKARKOTA (M) SDN BHD
• SKT CONSTRUCTION SDN BHD

Want to read the full list? Click here: Property Developers Who Failed to Settle Compound Payment (as of 18th August 2023)

“Help! I purchased a home from a blacklisted developer. “How should I proceed?”

There is a way to approach this matter: you can cancel your sales and purchase agreement (SPA).

1) For the licensed developer:

Following the amended Housing Development Act (Control and Licensing) 1996 [Act 118], house buyers can revoke their SPA if the housing project they purchased shows no development within 6 months of signing the contract. However, permissions from the Ministry and written consent from the banks are required.

Furthermore, the financier shall not withhold permission to terminate the arrangement in an unreasonable manner. Once the process is completed, the registered housing developer should refund your money (interest-free) within 30 days.

2) For the unlicensed developer:

Under the same Act, you can file complaints with the Housing and Strata Management Tribunal at the Housing Claims Tribunal, including issues with unlicensed developers.

Conclusion

While there are many factors to consider when determining when and where to buy a home, the simplest way to begin is with a simple background check of the property developers. It doesn’t matter if you run into them at the mall or a real estate expo; double-check their KPKT credibility to avoid falling victim, as there are more than 100 blacklisted property developers in Malaysia.