Blacklisting Isn’t Enough: The Real Fix Needed for Malaysia’s Abandoned Housing Projects

Marcus Liew
May 25
3 min read

Despite recent headlines about the Housing and Local Government Ministry (KPKT) blacklisting 109 errant developers, housing experts and consumer advocates say it’s too little, too late—and in some cases, entirely ineffective.

The move, aimed at curbing abuse by developers who hop from one failed project to another using new company names, has been described as cosmetic at best. And with 173 unlicensed developers still operating, many are questioning: Where is the real enforcement?

Why Blacklisting Alone Fails

The National House Buyers Association (HBA) has voiced strong concerns, arguing that blacklisting companies and directors often does not prevent the real culprits from resurfacing. This is because:

Developers commonly set up new subsidiaries for each project—an accepted corporate strategy to limit liability.
Blacklisting current board members misses those behind the scenes—the financiers, shadow directors, and beneficial owners.
Individuals easily circumvent bans by appointing proxies such as relatives or associates as directors of new companies.

As HBA puts it: “You think the ministry has a record of their family trees?”

Laws Exist—But Are Rarely Enforced

The Housing Development (Control & Licensing) Act 1966, specifically Section 18A, clearly criminalises project abandonment. Since June 1, 2015, developers found guilty could face:

RM250,000 to RM500,000 in fines
Up to 3 years in prison
Or both

Yet nearly a decade later, there is no record of any developer being charged or prosecuted under this provision.

Administrative Breaches vs Criminal Abandonment

Many of the 109 developers were blacklisted simply for failing to submit reports or audit documents - technical breaches that pale in comparison to the real harm done by those who abandon entire housing projects, leaving buyers in limbo.

Even worse, KPKT appears more focused on issuing compound fines - collecting RM9.03 million in 2023 - rather than pursuing criminal charges. This raises the question: Is enforcement being driven by revenue collection rather than buyer protection?

What About Tribunal Award Violators?

Under Section 16AD of the HDA, any developer that ignores a Housing Tribunal award can be:

Fined RM10,000 to RM50,000
Jailed for up to 2 years
Fined RM1,000/day for continued non-compliance

Still, many developers simply default on Tribunal awards, and little is done to hold them accountable. This further erodes public trust in the justice system meant to protect house buyers.

The Bigger Problem: Unlicensed Developers

As of March 31, 2025, a total of 173 unlicensed developers have been listed on KPKT’s website - many of whom have left a trail of financial and emotional damage. Yet these entities rarely face consequences, criminal or financial.

If licensed developers are merely fined for non-compliance, and unlicensed developers go unpunished entirely - what message is being sent to the industry?

Time for Accountability, Not Optics

To restore public confidence, the following steps are urgently needed:

Full enforcement of Section 18A – Prosecute developers behind abandoned projects.
Blacklist entire boards from license inception to abandonment – Not just at the point of default.
Uncover shadow directors and financiers – Go beyond registered company names.
Name and shame – Publish the real individuals behind failed projects.
Take action against unlicensed developers – Criminal penalties must be imposed.

Final Thoughts

Laws without enforcement are just empty words. Malaysians deserve better than to be protected in theory but abandoned in practice. As HBA aptly puts it:

“Don’t just fine. Prosecute. Don’t just blacklist names. Unmask the real faces.”

Until meaningful action is taken, blacklisting remains a band-aid solution to a gaping wound in the housing sector.