What is considered a delayed project and two ways to approach this as a homebuyer if you’re a victim?

The topic of abandoned properties seems to be a never-ending issue in Malaysia. Inexperienced developers, financial difficulties, failure to execute the right marketing and sales strategies, poor management of the company and business affairs are among the reasons for abandoned projects. Other reasons include poor ground conditions. 

There was also a period of when property buyers in Sabah fought endlessly for their unfinished home and fortunately the development has resumed.

_{Undertaken abandoned project status in Sabah. Source: Sabah State Ministry of Housing and Local Government}

What can the Government and private organization do to help activate delayed projects?

Projects that are severely delayed fall into two categories; ‘sick projects’ and abandoned projects. 

_{‘Sick Projects’ are still salvageable for the interest of all the purchasers and it’s supply chain. Source: Ministry of Housing and Local Government. Image by Property Hunter.}

When projects are stopped but not yet abandoned it may be due to developers facing poor sales or poor market condition. Nevertheless, it is still salvageable since the developer is not yet declared as bankrupt. In this case, the Government should take an advisory role to assist developers while working together with banks to complete the project. 

_{A delayed project can only be considered as abandoned after it is officially declared by the government.  Source: Ministry of Housing and Local Government. Image by Property Hunter.}

However, arduous efforts are needed when the developer is bankrupt and their project(s) is officially declared as abandoned by the Ministry of Housing and Local Government. The Government is expected to take the initiative to salvage the project under these circumstances by inviting ‘white knights’, banks and other investors to rescue the project. 

If you’re a victim of a delayed housing project in Sabah, here’s what you can do

1.     Lodge a complaint to State Ministry of Housing and Local Government

Before lodging a complaint to the local authority, please ensure that you have made the effort to reach to the developer in writing to raise your concern pertaining to the delayed project. On top of that, track if there is no progress on the project for six (6) months continuously from the SPA’s execution date.

However, if there are no actions taken by them, you may lodge a complaint in writing to the Sabah State Ministry of Housing and Local Government. Do attach a copy of the letter you sent to the developer previously. You may issue the complaint letter to the following address:

Kementerian Kerajaan Tempatan dan Perumahan
Tingkat 5-6,10-11,15-18
Wisma Innoprise, Jalan Sulaman, Teluk Likas,
88817 Kota Kinabalu

Other contact details for Sabah State Ministry of Housing and Local Government:

Contact :  088-328000
Fax : 088-383172 01
Email address: aduan.kktp@sabah.gov.my

2.     Terminate the Sale and Purchase Agreement (SPA)

Another option would be terminating the Sale and Purchase Agreement. Refer to Section 12A of State of Sabah Housing Development (Control and Licensing) Enactment 1978 for the ‘Statutory termination of sale and purchase agreement’.

_{Source: State of Sabah Housing Development (Control and Licensing) Enactment 1978}

There are two (2) criterias that need to be fulfilled before homebuyers can write in to the Sabah State Ministry of Housing and Local Government for the SPA termination.

1. No progress on the project for six (6) months continuously from the SPA’s execution date; and



2. At least 75% of other home buyers who had also entered into the SPA have agreed with the licensed housing developer in writing to terminate the sale and purchase agreements.

On top of that, any application shall be supported by the following documents:

1. The written consent of the licensed housing developer and all the homebuyers who agreed to terminate the SPAs, witnessed by solicitors or a Commissioner for Oaths; and



2. Other documents or evidence required by the Minister to prove that the developer is financially capable of refunding to the purchasers and their financiers.

Always do thorough research and be smart before making a large purchase like a home. You can look up on the internet, seek advice from estate agents and bankers or anybody you trust to find out more about the project and the developer. Lookup new property launches listed by Property Hunter.