Housing Development Act – HDA
Housing Development Act (HDA)
HDA plays a significant role in protecting the property buyers’ interests from the issues between developer and property purchaser or purchaser itself. The issues are include but not limited to, setting rules and regulations for if developers start to charging purchaser for a new property, helps residents if a property is abandoned as well as be a mediator if there are conflicts between developer and purchasers.
Risk with NON-HDA Projects
While, for the some of the properties which under commercial titled that do not get the protection by HDA. Thus, most of the purchaser who buy the commercial property have to fight with developer by themselves should the property is abandoned or there is a hidden clause on the contract which is may unfavorable to a purchaser but the developer can get the favors from it.
Furthermore, the developers of commercial properties are subject to the whims of the developers. Which mean if a project is regulated by HDA, then a purchaser need to pay the housing loan upon completion of earthworks. While if the project is not under HDA, the developer can ask for the payment with purchaser as soon as a building is starting to construct. A clause in the contract may be worded as, “… upon commencement of works”.
Defect Liability Period (under HDA)
In case of dispute from the developer, the process of submitting a claim for defects is stated clearly in HDA Malaysia’s prescribed contracts. Any issues between the purchaser and the developer relating to this can be elevated to the Homebuyer Tribunal established under the act.
Additionally, if the property in question is strata titled, residents can file claims for defects involving common property, and they are also entitled to an additional retention sum under the strata act as ruled by the Commissioner of the Buildings.
Developer License and Advertising and Sales Permit (under HDA)
Many people are unaware of the existing legislation regarding housing developments and therefore their rights as a home buyer. In fact, the HDA offers several layers of protection to home buyers:
- All the housing developers are required to obtain their developer licence and advertising and sales permit before they can proceed to offer and sell properties. Furthermore, all advertisements posted are required to state the stipulated key particulars of the housing development project as below:
- housing developer’s licence number and validity date;
- the advertisement and sale permit number and validity date;
- the name and address of the licensed housing developer;
- the tenure of the land if the land is leasehold, its expiry date, restriction in interest and encumbrances, if any, to which the land is subject;
- the description of the housing development;
- any parking lot which is an accessory parcel to the housing accommodation in a parcel;
- the name of the housing development;
- the expected date of completion;
- the selling price of each type of housing accommodation;
- where applicable, the minimum and maximum selling price of each type of housing accommodation;
- the number of units of each type available; and the name of the appropriate authority.
With the above, a potential buyer will have a clearer picture and better information in relation to the development project.
Not All Properties Come With HDA Malaysia Protection
Commercial Property
It is important to note that not all properties acquired from the primary market come with a warranty and defect liability period, as the Housing Development Act (HDA) only protects properties and developments of Residential title.
Buyers of commercial titled properties such as office, retail or industrial units are hence strongly advised to scrutinise the SPA document’s terms and conditions, particularly the stipulation on defects claim. Better yet, obtain a copy of the contract and consult a lawyer before signing it.
Secondary Property Market
Another case where the “new” property is not covered by a defect liability warranty is if the buyer purchased a property from the secondary market. These properties are bought on an “as is where is” basis. This legal phrase means that the buyer agrees to buy the house in whatever condition it currently exists with all faults, whether or not immediately seen.
So before signing on the dotted line, do a meticulous check and bring along an expert (an engineer or architect) to advise you on whether to proceed with the transaction to buy a resale home or not.
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