Welcome Main  Forum FAQ Useful Links Sample Letters Tribunal E-Mail Contact

This website is
 

Disclaimer: These laws are here for your convenience. Great care is exerted to assure correctness. However, the contents of this library and its maker will assume no liabilities. Persons who need to rely on the text of the Acts and Regulations for legal and other purposes may obtain the Government Printer's official printed version.

HOUSING DEVELOPMENT (CONTROL AND LICENSING) ACT, 1966
(Act 118)

(In forced from 1 December 2002 to 11 April 2007)

HOUSING DEVELOPMENT (CONTROL AND LICENSING) ACT, 1966
(Act 118)

(In forced from 1 December 2002 to 11 April 2007)

PREAMBLE

First enacted 1966 (Act No. 38 of 1966)
Revised 1973 (Act 118 w.e.f.16 August 1973)

An Act to provide for the control and licensing of the business of housing development in West Malaysia and for matters connected therewith.

PART I - PRELIMINARY

(2) The Controller and Deputy Controllers shall have and may exercise any of the powers conferred on an Inspector by or under this Act.

(4) Without prejudice to subsection (2), the Controller may, in writing, delegate any of his powers and functions under this Act in respect of the investigation of offences under this Act and the enforcement of this Act to any public officer or officer of a local authority.

PART II - LICENSING OF HOUSING DEVELOPERS

(1) No housing development shall be engaged in, carried on, undertaken or caused to be undertaken except by a housing developer in possession of a licence issued under this Act.

(1) Subject to the exercise of power of waiver by the Minister under subsection (2), the licence applied for under section 5 shall not be granted -

(a) unless the applicant has a capital issued and paid up in cash of not less than two hundred and fifty thousand ringgit and makes a deposit with the Controller of not less than two hundred thousand ringgit in cash or in such other form as the Minister may determine, if the application is made by a company; or

(b) unless the applicant makes a deposit with the Controller of not less than two hundred thousand ringgit in cash or in such other form as the Minister may determine, if the application is made by a person or body of persons;

(c) unless the applicant is not himself nor is any member or partner thereof a person convicted of an offence involving fraud or dishonesty or an undischarged bankrupt, if the application is made respectively by a person or a body of persons or a firm;

(d) unless no one who is convicted of an offence involving fraud or dishonesty or who is an undischarged bankrupt is holding office as director, manager or secretary of the applicant or other similar office or position, if the application is made by a company, or is holding office as president, secretary or treasurer of the applicant or other similar office or position, if the application is made by a society;

(e) unless, at the time the application is made, the applicant or any member or partner of the applicant, if the applicant is a body of persons or firm, or a director, manager or secretary of the applicant, if the applicant is a company, has not, due to a conviction for an offence under this Act, been sentenced to a fine exceeding ten thousand ringgit or to imprisonment (other than imprisonment in default of a fine not exceeding ten thousand ringgit);

(f) unless, at the time the application is made, a person who had been a director of or had been directly concerned in the management of the business of a licensed housing developer which has been wound up by a court is not a director or is not directly concerned in the management of the business of the applicant; and

(g) if the registration of the applicant's architect or engineer has been cancelled and has not been reinstated under the Architects Act 1967 [Act 117] or the Registration of Engineers Act 1967 [Act 138] at the time the application is made.

6A.  Controller to keep deposit.

Subject to any direction of the Minister, the Controller shall keep the deposit made under paragraphs 6(1)(a) and (b) until the expiry of the defect liability period of the housing development.

If any licensed holding developer-

(a) is carrying on his business, in the opinion of the Controller, in a manner detrimental to the interest of the purchasers or to any member of the public;

(b) has insufficient assets to cover his liabilities;

(c) is contravening any of the provisions of this Act; or

(d) has ceased to carry on housing development in West Malaysia,

PART III - DUTIES OF A LICENSED HOUSING DEVELOPER

In addition to the liabilities and duties imposed in sections 8 and 9, a licensed housing developer shall -

(a) within four weeks of the making of any alterations in or to any of the documents submitted to the Controller under subsection 5 (3) furnish to the Controller written particulars of the alterations;

(b) exhibit at all times in a conspicuous position in any office and branch office of the licensed housing developer a copy of his licence, advertisement and sale permit and a copy of his last audited balance-sheet as soon as the same is available and such information as the present or former full name, usual residential address, nationality, nationality of origin (where the present nationality is not that of origin), business or occupation (if any) of each person who has the control and management of the business of the licensed housing developer and particulars of any other directorship held by that person;

(c) keep or cause to be kept in his office in West Malaysia such accounting and other records as will sufficiently explain the transactions and the financial position of the licensed housing developer and enable true and fair profit and loss accounts and balance-sheets and any documents required to be attached thereto to be prepared from time to time, and shall cause these records to be kept in such manner as to enable them to be conveniently and properly audited;

(d) every year appoint an auditor or auditors in the manner required under section 9;

(e) within six months after the close of the financial year of the licensed housing developer in question send to the Controller and also publish in the Gazette a copy of the report of the auditor prepared under section 9 together with a copy of his balance-sheet and profit and loss account,

(f) not later than the 21st day of January and the 21st day of July of each year, send to the Controller a statement, in such form and containing such information as the Controller may from time to time determine, on the progress of the housing development which the housing developer is engaged in, carries on or undertakes or causes to be undertaken;

(g) where he considers that he is likely to become unable to meet his obligations to the purchasers at any stage of the housing development before the issuance of the certificate of fitness for occupation, forthwith inform the Controller of such fact;

(h) inform the Controller of the handing over of vacant possession of the housing accommodation in the housing development to the purchasers and submit a certified true copy of his architect's certificate certifying that the construction of the housing accommodation has been duly completed and that water and electricity supplies are ready for connection to the housing accommodation;

(i) inform the Controller if the appropriate authority has refused to accept the submission of any document relating to the issuance of certificates of fitness for occupation and submit the refusal letter from the appropriate authority to the Controller;

(j) ensure that the development of the housing accommodation has been carried out in accordance with any requirements prescribed under any law regulating buildings and has exercised all such diligence as may be required for the issuance of certificates of fitness for occupation and for the issuance and transfer of the titles to the housing accommodation to the purchasers; and

(k) inform the Controller of the progress in the issuance of separate or strata titles for the housing accommodation and the transfer of such titles to the purchasers.

7A.  Licensed housing developer to open and maintain Housing

(1) Subject to subsection (9), every licensed housing developer shall open and maintain a Housing Development Account with a bank or finance company for each housing development undertaken by the licensed housing developer.

(4) The licensed housing developer shall not withdraw any money from the Housing Development Account except as authorised by regulations made under this Act.

(a) the licensed housing developer enters into any composition or arrangement with his creditors or has a receiving order or an adjudication order made against him; or

(b) the licensed housing developer, being a company, goes into voluntary or compulsory liquidation.

(a) the monies in the Housing Development Account and moneys held by the stakeholder shall vest in the official receiver, trustee in bankruptcy or liquidator as the case may be, to be applied for all or any of the purposes for which monies in the Housing Development Account are authorised by regulations made under this Act to be withdrawn; and

(b) any money remaining in the Housing Development Account, and moneys held by the stakeholder after all payments have been made pursuant to paragraph (a) and all liabilities and obligations of the licensed housing developer under the sale and purchase agreements in respect of the housing development have been fully discharged and fulfilled, shall be held by the official receiver, trustee in bankruptcy or liquidator as the case may be, as money belonging to the licensed housing developer to be applied in accordance with the law relating to bankruptcy of or the winding-up of a company.

(10) Any housing developer who contravenes or fails to comply with this section shall be guilty of an offence and shall, on conviction, be liable to a fine which shall not be less than fifty thousand ringgit but which shall not exceed five hundred thousand ringgit and shall also be liable to imprisonment for a term not exceeding three years or to both.

For the purpose of sections 8, 8A, 11 and 12, "licensed housing developer" includes any housing developer whose licence has expired.

(1) Where a licensed housing developer proposes to enter into an arrangement or agreement to sell, transfer, assign, dispose of or reconstruct his business or management relating to housing development either by amalgamation or otherwise, the licensed housing developer shall as soon as possible notify the Controller of the proposed arrangement or agreement and unless approved by the Controller under subsection (2), the licensed housing developer shall not proceed with that arrangement or agreement.

(1) Notwithstanding anything contained in any agreement, a licensed housing developer may apply to the Minister for approval to terminate all the sale and purchase agreements entered into in respect of a housing development or any phase of a housing development which the housing developer is engaged in, carries on or undertakes or causes to be undertaken if-

(a) six months after the execution of the sale and purchase agreements, development of the housing accommodation in that housing development or phase has not commenced; and

(b) at least seventy-five per cent of all the purchasers who have entered into the sale and purchase agreements have agreed with the housing developer in writing to terminate the sale and purchase agreements.

(a) the written consent of the licensed housing developer and of each of the purchasers who have agreed to terminate the sale and purchase agreements and such consent shall have been duly executed by the licensed housing developer and the purchaser, as the case may be, and witnessed by his solicitors or a Commissioner for Oaths not earlier than one month before the date of the application; and

(b) such other documents or evidence as the Minister may require or as may be determined including such evidence which may satisfy the Minister that the licensed housing developer is financially capable of refunding to the purchasers and their financiers all the moneys paid by them to the licensed housing developer if the Minister approves such application.

(9) The licensed housing developer shall refund all moneys received by the licensed housing developer from the respective purchasers free of any interest within the period stated in the Minister's approval.

(1) Subject to subsection (2), every licensed housing developer shall every year or as often as the need arises appoint a person approved by the Minister to be his auditor or auditors; and where a licensed housing developer fails to make the appointment or fails to appoint another auditor in place of an auditor who has resigned his office or dies or whose appointment has been terminated, the Minister may appoint any person or persons who in his opinion is or are fit and proper to be an auditor or auditors for the licensed housing developer in question and fix remunerations which shall be paid to the auditor or auditors so appointed and such remunerations shall be paid by the licensed housing developer for whom the auditor or auditors is or are so appointed.

(a) the balance-sheet and the profit and loss accounts are properly drawn up and so as to give a true and fair account of the state of the licensed housing developer's affairs;

(b) the accounting and the records examined by him are properly kept; and

(c) if the auditor has called for an explanation or information from the officers or agents of the licensed housing developer, such explanation or information has been satisfactory.

PART IV - INVESTIGATION AND ENFORCEMENT

(2) The Minister may direct the Controller or an Inspector to make an investigation under subsection (1) -

(a) if he has reason to believe that the housing developer in question is carrying on his business in a manner detrimental to his purchaser; or has assets insufficient to meet his liabilities or is contravening any of the provisions of this Act; or

(b) if an application for such an investigation is made to him, and every such application shall be supported by not less than five purchasers and accompanied with such evidence and such security as the Minister may require for the purpose of satisfying himself that the application is made in good faith, and of paying the costs of such an investigation.

(1) If it appears to a Magistrate, upon written information on oath and after such inquiry as he considers necessary, that there is reasonable cause to believe that any premises have been used or are about to be used for, or there is in or on any premises evidence necessary to establish, the commission of an offence under this Act, the Magistrate may issue a warrant authorizing an Inspector to whom it is directed, at any reasonable time by day or night and with or without assistance-

(a) enter any premises and there search for, seize and detain any property, book or other document;

(b) inspect, make copies of, or take extracts from, any book or other document so seized and detained;

(c) take possession of, and remove from the premises, any property, book or other document so seized and detained;

(d) search any person who is in, or on, such premises, and for the purpose of such search detain such person and remove him to such place as may be necessary to facilitate such search, and seize and detain any property, book or other document found on such person;

(e) break open, examine, and search, any article, container or receptacle; or stop, detain or search any conveyance.

(a) break open any outer or inner door of such premises and enter such premises and every part of such premises;

(b) remove by force any obstruction to such entry, search, seizure, detention or removal; or

(c) detain all or any persons found on any premises, or in any conveyance, searched under subsection (1) until such premises or conveyance have been searched.

(a) the investigation would be adversely affected; or

(b) evidence of the commission of an offence is likely to be tampered with, removed, damage or destroyed,

(a) on the close of investigations or any proceedings arising therefrom; or

(b) with the prior written consent of the Controller for the Inspector to act on his behalf for this purpose at any time before the close of investigations,

(7) A record in writing shall be made by the Inspector effecting any release of any property, book or other document under subsection (6) in respect of such release specifying therein in detail the circumstances of, and the reason for, such release.

(1) An Inspector may search any person whom he has reason to believe has on his person any property, book or other document, or other article necessary, in his opinion, for the purpose of an investigation into any offence under this Act, and for the purpose of such search may detain such person for such period as may be necessary to have the search carried out, which shall not in any case exceed twenty-four hours without the authorization of a Magistrate, and may remove him in custody to such place as may be necessary to facilitate such search.

No person shall-

(a) refuse any Inspector exercising his powers under section 10A or 10B access to any premises or any part of such premises, or fail to submit to the search of his person;

(f) rescue or endeavour to rescue any thing which has been duly seized;

(g) furnish to the Inspector as true any information which he knows or has reason to believe to be false; or

(1) Where an Inspector finds, seizes, detains, or takes possession of any book or other document in the exercise of any power under this Act, and such book or other document or any part of it is in a language other than the national language or the English language, or in any sign or code, the Inspector may orally or in writing require the person who had the possession, custody or control of such book or other document, to furnish to the Inspector a translation in the national language of such book or other document within such period as, in the opinion of the Inspector, would be reasonable having regard to the length of the book or other document, or other circumstances relating to it.

(1) Where an Inspector suspects any person to have committed an offence under this Act, he may, if in his opinion it is reasonably necessary to do so for the purposes of investigating into such offence-

(a) order any person orally or in writing to attend before the Inspector for the purpose of being examined orally by the Inspector in relation to any matter which may, in the opinion of the Inspector, assist in the investigation into the offence;

(b) order any person orally or in writing to produce before the Controller or the Inspector books, other documents, property, articles, or things which may, in the opinion of the Controller or the Inspector, assist in the investigation into the offence; or

(c) by written notice require any person to furnish a statement in writing made on oath or affirmation setting out in the notice all such information which may be required under the notice, being information which, in the opinion of the Controller, would be of assistance in the investigation into the offence.

(a) a person to whom an order under paragraph (1)(a) has been given shall attend in accordance with the terms of the order to be examined, and shall continue to so attend from day to day as directed by the Inspector until the examination is completed, and shall during such examination disclose all information which is within his knowledge, or which is available to him, or which is capable of being obtained by him, in respect of the matter in relation to which he is being examined, whether or not any question is put to him with regard thereto, and where any question is put to him he shall answer the question truthfully and to the best of his knowledge and belief, and shall not refuse to answer any question on the ground that it tends to incriminate him;

(b) a person to whom an order has been given under paragraph (1)(b) shall not conceal, hide, destroy, alter, remove from or send out of Malaysia, or deal with, expend, or dispose of, any book, other document, property, article, or thing specified in the order, or alter or deface any entry in any such book or other document, or cause such act to be done, or assist or conspire to do the act; and

(c) a person to whom a written notice has been given under paragraph (1)(c) shall, in his statement made on oath or affirmation, furnish and disclose truthfully all information required under the notice which is within his knowledge, or which is available to him, or which is capable of being obtained by him, and shall not fail to furnish or disclose the information on the ground that it tends to incriminate him.

(a) for, or in relation to, an offence under this Act; or

(b) for, or in relation to, any other matter under this Act,

The powers of investigation conferred by this Act on an Inspector, may be exercised by him against-

(a) any past or present business associate; or

(b) any person who is or was concerned in the control or management, in whole or in part of the affairs,

The Controller may on his own initiative, or on the request of an Inspector-

(b) allow a police officer or any other public officer to have access to and inspect any property, book, other document, article or thing which had been produced before, or seized, detained or taken possession of, by an Inspector under this Act, and such police or other public officer may make such use of any knowledge gained by such access or inspection as may be necessary or expedient in relation to the exercise of his powers, the performance of his functions, or the discharge of his duties, in respect of any person.

(1) Except as provided in subsection (3), no witness in any civil or criminal proceedings shall be obliged or permitted to disclose the name or address of any informer or the substance and nature of the information received from him or to state any matter which may lead to his discovery.

(3) If on trial for any offence under this Act the court after full inquiry into the case believes that the informer willfully made in his complaint a material statement which he knew or believed to be false or did not believe to be true, or if in any other proceeding the court is of the opinion that justice cannot be fully done between the parties to the proceeding without the discovery of the informer, it shall be lawful for the court to require the production of the original complaint, if in writing, and permit enquiry, and require full disclosure, concerning the informer.

An Inspector when acting under this Part shall on demand declare his office and produce to the person against whom he is acting such written authorization as the Controller may direct to be carried by such Inspector.

No Inspector shall be entitled to exercise any of the powers under this Part without prior written authorization from the Controller.

PART V - POWERS OF MINISTER

(1) Where on his own volition a licensed housing developer informs the Controller or where as a result of an investigation made under section 10 or for any other reason the Controller is of the opinion that the licensed housing developer becomes unable to meet his obligations to his purchasers or is about to suspend his building operations or is carrying on his business in a manner detrimental to the interests of his purchasers, the Minister may without prejudice to the generality of the powers of the Minister to give directions under section 12 for the purpose of safeguarding the interests of the purchasers of the licensed housing developer -

(a) direct the licensed housing developer in question to take such steps as he may consider necessary to rectify any matter or circumstance;

(b) direct that a person be appointed or himself appoint a person to advise the licensed housing developer in the conduct of his business;

(c) with the concurrence of the Minister of Finance direct a company to assume control and carry on the business of the housing developer upon such terms and conditions as the Minister may determine;

(ca) certify that the licensed housing developer has abandoned the housing development;

(d) direct that the licensed housing developer present a petition to the High Court for the winding up of his business; or

(e) take such action as the Minister may consider necessary in the circumstances of the case for carrying into effect the provisions of this Act.

(a) the licensed housing developer in question shall submit his business to the control of the company and shall provide the company with such facilities as the Controller may consider necessary for the purpose of carrying on the business of the licensed housing developer;

(b) the company shall take over and become in control of and continue to carry on the business of the licensed housing developer until such time as the Minister may in writing otherwise direct; and

(c) every such assumption and cessation of control of the business of a licensed housing developer pursuant to a direction of the Minister made under paragraph (1) (c) shall be published by the Controller in the Gazette.

The Minister may give to a licensed housing developer such directions as he considers fit and proper for the purpose, of ensuring compliance with this Act, and any such direction shall be made in writing and shall be binding on the licensed housing developer to whom the direction is made.

If any licensed housing developer -

(a) is carrying on his business, in the opinion of the Controller, in a manner detrimental to the interest of the purchasers or to any member of the public;

(c) is contravening any of the provisions of this Act; or

Where the Controller is satisfied that the conduct of an architect or engineer of a housing developer has prejudiced the interest of the purchaser of the licensed housing developer, the Controller may report such conduct of the architect or engineer to his respective professional body.

No licence or any right to the licence issued to a housing developer under this Act shall be transferred or assigned and any such transfer or assignment shall be void.

Before revoking or suspending a licence under section 13 or before varying, cancelling or altering any conditions imposed on a licence or before imposing thereon any new or additional conditions under subsection 5 (5), the Controller shall notify the housing developer who is affected by the action proposed to be taken by the Controller of the aforesaid proposed action and shall give the licensed housing developer an opportunity to submit reasons or an explanation why the aforesaid proposed action should not be carried out.

(1) Without prejudice to anything contained in any written law relating to companies, co-operative societies, societies and partnerships, any person who acts or holds office of a director, manager or secretary of a licensed housing developer or a similar office or position shall cease to hold that office or position -

(a) if he becomes bankrupt or suspends payment or compounds with his creditors; or

(b) if he is convicted of an offence involving dishonesty or fraud.

An applicant applying under subsection 5 (3) or a licensed housing developer, as the case may be, who is aggrieved by the action or decision of the Controller -

(a) in refusing to grant a licence to him under section 5;

(b) in varying, altering or cancelling any conditions of his licence or imposing thereon any new or additional conditions under subsection 5 (5);

(c) in refusing to give approval to an arrangement or agreement proposed to be entered into by a licensed housing developer under section 8, or in approving the same but subject to conditions being imposed thereon; or

(d) in revoking or suspending his licence under section 13,

PART VI - TRIBUNAL FOR HOMEBUYER CLAIMS

For the purpose of this Part, "homebuyer"  means a purchaser and includes a person who has subsequently purchased a housing accommodation from the first purchaser of the housing accommodation.

A tribunal to be known as the "Tribunal for Homebuyer Claims" is established.

(1) The Tribunal shall consist of the following members:

(a) a Chairman and a Deputy Chairman to be appointed by the Minister from amongst members of the Judicial and Legal Service; and

(b) not less than five other members to be appointed by the Minister from amongst persons who are members of the Judicial and Legal Service or advocates and solicitors of the High Court in Malaya and have practised for not less than seven years.

(a) shall hold office for a term not exceeding three years; and

(b) shall be eligible for reappointment upon the expiry of his term of office but shall not be appointed for more than three consecutive terms.

Where the Chairman is for any reason unable to perform his functions or during any period of vacancy in the office of the Chairman, the Deputy Chairman shall perform the functions of the Chairman.

The office of a member of the Tribunal shall become vacant-

(a) upon the death of the member;

(b) upon the member resigning from such office by giving three months' written notice to the Minister;

(c) upon the expiry of his term of office; or

(d) upon the member ceasing to be a member of the Judicial and Legal Service or an advocate and solicitor of the High Court in Malaya.

The Minister may revoke the appointment of a member of the Tribunal appointed under paragraph 16C(1)(b)-

(b) if he has become incapable of properly carrying out his duties as a member of the Tribunal;

(i) an offence involving fraud, dishonesty or moral turpitude;

(ii) an offence under a law relating to corruption;

(iii) an offence under this Act; or

(iv) any other offence punishable with imprisonment for more than two years;

(d) if he is adjudicated a bankrupt;

(e) if he has been found or declared to be of unsound mind or has otherwise become incapable of managing his affairs; or

(f) if he absents himself from three consecutive sittings of the Tribunal without leave of the Chairman.

A member of the Tribunal appointed under paragraph 16C(1)(b) may at any time resign his office by giving three months' written notice to the Minister.

Where a member ceases to be a member of the Tribunal, the Minister may appoint another person to fill the vacancy.

(1) The members of the Tribunal appointed under paragraph 16C(1)(a) shall be paid such fixed allowances and other allowances as the Minister may determine.

(2) The members of the Tribunal appointed under paragraph 16C(1)(b) shall be paid-

(a) a daily sitting allowance during the sitting of the Tribunal; and