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What Is The Housing Development Act (HDA)?

The Housing Development Act (HDA) is a Malaysian law enacted to regulate housing developments, safeguard the interests of homebuyers, and promote transparency in the real estate industry. Originally named the Housing Developers (Control and Licensing) Act 1966 (Act 118), it was later amended and renamed to its current title.





 

Main Objectives of HDA


  1. Prevent Abuse in the Housing Industry: Introduced to address unethical practices in the early housing sector.

  2. Regulate Housing Developers: Ensures that developers comply with legal requirements for licensing, financial management, and construction standards.

  3. Protect Homebuyers: Provides safeguards to reduce risks associated with buying properties from developers.

 

Key Roles and Protections Under HDA


1. Standardized Sale and Purchase Agreement (SPA)

  • Developers must use a legally prescribed SPA format.

  • The agreement ensures buyers understand the terms and processes clearly, reducing misinterpretations.


2. Protection of Purchaser’s Funds

  • Developers must maintain a Housing Development Account to safeguard buyers' payments.

  • These funds are monitored to ensure they’re used exclusively for the respective housing project.


3. Defect Liability Period (Warranty)

  • Buyers are entitled to a 24-month defect liability period starting from the date they receive the keys.

  • During this time, developers must repair any defects at no cost to the buyer.

  • Buyers are advised to inspect their homes thoroughly and report issues promptly.


4. Homebuyer Tribunal

  • Addresses disputes, conflicts, and claims between buyers and developers.

  • Provides an affordable and accessible avenue for legal recourse without requiring lengthy court procedures.


5. Strata Property Protections

  • For strata-titled properties, residents can:

    • File claims for defects in common areas such as lifts, hallways, or facilities.

    • Access additional protections under the Strata Management Act via the Commissioner of Buildings (COB).


 

Other Important HDA Features


  1. Licensing for Developers:

    • Developers must obtain a license before undertaking housing projects.

    • This license ensures they meet legal, financial, and technical standards.


  2. Housing Development Account (HDA):

    • All collected funds from buyers are held in this account to ensure financial discipline and project completion.


  3. Transparency and Accountability:

    • Detailed project timelines, specifications, and payment schedules are outlined in the SPA, ensuring developers "play by the book."

 

Claims Process Under HDA


If disputes arise due to defective workmanship or breach of SPA:

  1. Report defects to the developer during the defect liability period.

  2. If unresolved, escalate the issue to the Homebuyer Tribunal.

  3. For strata properties, additional claims can be filed with the Commissioner of Buildings (COB) for common property defects.

 

Conclusion


The Housing Development Act is a cornerstone of Malaysia’s property sector, providing essential safeguards for homebuyers and ensuring developers operate within a transparent, regulated framework. By understanding your rights under the HDA, you can confidently navigate the process of purchasing and owning property in Malaysia.

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