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Making the right choice
04/08/2006 By National House Buyers Association
Published in Iproperty Magazine

For many people, the purchase of a home is the most important financial decision of their lives. Therefore, it makes sense to approach the decision carefully. The purchase of a home is unlike any other consumer product as it covers a lot of ground - including legal, financial, technical and emotional considerations. To not educate yourself and learn from the mistakes of others only sets you up to be at best, disappointed and at worst, being 'house poor'.

Caveat emptor! Let the buyer beware - The idea that buyers take responsibility for the condition of the items they purchase and should examine them before purchase. How true is this for the property buyers? It works well for buyers of completed units but

not if you are buying from plans, when the construction has not even commenced. There is nothing as yet for you to inspect or assess. At least with knowledge you can enter into the world of homeownership with more confidence.

The process of building and selling a new house or apartment unit involves coordination among a large number of parties: land owners and developers; contractors; trades people; government regulators; designers; architects; consultants; planners; building material suppliers; lawyers; bankers and house buyers.

First time house buyers normally have little knowledge of what aspects to look for when they are ready to acquire a home. Thus the onus is on a prospective house buyer to be well educated on their rights and to seek help from all sources available before they make their first payment.

In reality, there is no 'one stop centre' for a study of a developer's record. It is common practice for big corporations to start a new private limited company for every project, as such, you might not be able to check track records unless you have the names of all the subsidiary companies formed. There are also instances where the development project is a one time venture that the company/individual undertakes. You will have to do some investigative work to get the information you want.

It is a good idea to be clear about which situation applies to you. The following table describes the different types of homes and whether you can expect the developer to be licensed under the Housing Development (Control & Licensing) Act 1966 (Amended 2002).

Type of Purchase Developer Information
Purchase of "house & land" & "subdivided units" from developers who are State Agencies, Cooperatives before 1st December 2002 Not required to be licensed
Purchase of "house & land" & "subdivided units" from developers who are State Agencies, Cooperatives after 1st December 2002 Check with Ministry of Housing's website ( to ensure that the particular project is licensed
Purchase of "house & land" & "subdivided units" from housing developers Check with Ministry of Housing's website to ensure that the particular project is licensed
Purchase of "house & land" & "subdivided units" from developers who build less than 4 units Not required to be licensed (Do additional follow-up- described below)
Purchase of commercial units e.g. Service apartments, land for bungalow building, office lots, factories from developers Not required to be licensed (Additional checking required - described below)

Additional follow-up: Whether the Developer is from whom you are considering buying a property is licensed or not, it is a good idea to take steps to evaluate their credentials.

Here, we list some of the sources where a potential house buyer can do their additional checking.

  1. from the National House Buyers Association. There are well over 2000 pages of information, a forum board, publications, FAQ as well as links to much more information. Numerous guides are available on specific subjects.
  2. if the parent company is listed - you can check with Bursa Malaysia (formerly known as Kuala Lumpur Stock Exchange)'s website for the background and for all the subsidiaries of the company. Read also all announcements for litigation news and public reports.
  3. if the company is licensed by the Ministry of Housing and Local Government, you may check for information based on housing developers, licence and permit numbers, projects, list of the addresses of consultants, architects of projects, statistics, etc. However the information is only restricted to the subsidiary company/Vendor and there is limited information on past performances and in some cases, the information has not been updated. Do write to the Ministry if the information that you seek has not been updated or make an attempt to visit the Monitoring & Enforcement Division of the Ministry.
  4. check the archives of some online news provider that provide this service.
  5. you can ask the developer for the names of the projects they have claimed to have developed - so that you can go look for yourself and maybe contact some of the past buyers for feedback. Most developers would not hesitate to provide these references of their past projects and those with website would have proudly provide the list of all their subsidiaries and past projects in their websites.
  6. check also from websites that provide court decisions eg, or These sites provide a picking of cases of companies involved in law suits.
  7. do keep yourself up-to-date on news on housing related laws, etc, by reading and keeping articles of relevance in your own file. The 'I don't know that' expression is so often heard by our volunteers from aggrieved house buyers. That makes us realise that house buyers often do not acquire enough knowledge in their own interest at the very beginning of their quest on homeownership.

However, these are just the initial checking steps. There are pros & cons of buying new from a developer. The pitfalls of buying 'off-plan' is just too numerous to mention here. As such, choosing a developer who understands the anxieties of a new house buyer, treats every individual buyer with respect and assist to minimise problems is the kind of developer that you would want to deal with.

Help from HBA

To help house buyers ask the right questions before purchasing a unit, HBA has published a book titled "House Buyers Guide Book". It is designed to provide valuable information that house buyers are expected to know before they jump to the conclusion to proceed with the purchase of houses. It is also to educate them to be aware of their rights as purchasers so as to be constantly on guard and to avoid the likelihood of possible and future pitfalls via-a-vis the housing developers in their quest to purchase a property "Off the Plans" i.e. incomplete units not readily available but under progressive construction.


Theses books are for sale at RM5.00 each in three languages either by mail order through our website or from HBA's Secretariat.

HBA's Meet the Public Sessions

HBA holds Meet the Public sessions on Saturdays, between 1 to 5pm at our Secretariat, address at No. 31, Level 3, Jalan Barat, Off Jalan Imbi, 51000, Kuala Lumpur. This is when our volunteers are available to give free advice.



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