Booking Fee for a New Home: Is It Allowed, and Can You Get It Back?

No. Under the HDA rules, a developer may not collect any payment, a booking fee included, before you sign the sale and purchase agreement. If a developer took your money and will not return it, KPKT says you can make an official complaint to the ministry.

The HDA is the Housing Development (Control and Licensing) Act 1966, the main law for home developers. Our HDA guide explains it. KPKT is the Ministry of Local Government Development, and JPN (the National Housing Department) is a department under it.

What the rule says

KPKT’s enforcement FAQ answers the question head on. Housing developers are not allowed to collect any payment before the sale and purchase agreement (SPA, the contract you sign with the developer) is signed. KPKT says this ban is in line with Regulation 11(2) of the 1989 housing regulations.

The payments a developer may collect are only the ones set in the SPA and its Third Schedule (the payment schedule in the agreement). KPKT’s 2021 homebuyer guide puts the same rule under its own heading, which bans the collection of any payment (booking fee) by a developer before the SPA.

The ban is worded as “any payment” (apa-apa bayaran in KPKT’s Malay). The HDA itself lets the government make rules on payments a buyer makes “under whatever name these may be described”. We found no official page that rules on a “registration fee” or a “holding deposit” by name.

What you pay when you sign

The standard SPA forms are Schedule G (landed homes) and Schedule H (strata homes). In both, the first line of the payment schedule is 10% of the price, due as soon as the agreement is signed. KPKT’s homebuyer guide says the 10% deposit is paid to the developer when you sign, subject to what you and the developer agree. Our SPA guide explains the agreement.

If the developer will not give it back

KPKT’s FAQ asks what a buyer can do when a developer refuses to return a booking fee before any agreement is signed. Its answer: the buyer may make an official complaint to the ministry, so that enforcement action can be taken in line with Regulation 11(2).

JPN’s Enforcement Division page (updated June 2024) says its complaints branch:

• takes complaints and enquiries about the HDA and its regulations through SISPAA (Sistem Pengurusan Aduan Awam, the public complaint system)
• answers complaints and enquiries received by phone, e-mail, letter, or in person at its counter
• acts as a go-between for buyers and developers to settle complaints

The page lists the Enforcement Division’s phone number as 03-8891 4356 and its e-mail as bp_jpn@kpkt.gov.my. KPKT’s FAQ lists “collecting a deposit or booking money without signing a sale and purchase agreement” as a case you can check on through the Enforcement Division’s complaints management branch.

We found no official page that sets a deadline for this complaint, says how long it takes, or promises the money back.

What about the Homebuyer Tribunal?

The Tribunal for Homebuyer Claims costs RM10 to file a claim against a developer. But KPKT says it can only hear a claim that comes from a sale and purchase agreement between the buyer and the developer. Its list of claims does include a deposit refund.

The HDA adds that a claim is not defeated because no SPA had been signed “at the time when the cause of action accrues”, if there was a “previous dealing” between the buyer and the licensed developer about buying the home. No official page says whether a booking fee counts.

KPKT’s answer on unreturned booking money points to a complaint to the ministry. It does not mention the tribunal. We found no official page that says the tribunal will hear a booking-fee refund when no SPA was signed.

Projects outside the HDA

The HDA covers licensed housing developers. KPKT’s statements on booking fees speak of housing developers. We found no official page that says whether the ban covers a project that is not sold under the HDA. Ask the developer if the sale is under the HDA before you pay anything.

Fake projects

KPKT’s FAQ covers one more case. A developer claims to run a housing project, asks for a registration payment, and the project does not exist. KPKT calls this a fraud case and says it must be reported to the police.

A real developer selling homes must have a valid development licence and an advertising and sales permit from the Housing Controller.

What to check before you buy

• Is any money asked for before the SPA is signed? Under the HDA rules, it should not be.
• Is the sale under the HDA? See our HDA guide.
• Does the developer have a development licence and an advertising and sales permit?
• If you paid, keep the receipt and every message about the payment.
• If a developer will not return money paid before the SPA, complain to JPN’s Enforcement Division.
• If the project does not seem to exist, go to the police.

This is a general guide, not legal or financial advice, and rules can change. Check your own case with KPKT or a lawyer before you act.