HDA Explained: The Law That Protects New Launch Buyers in Peninsular Malaysia

The HDA, or Housing Development (Control and Licensing) Act 1966, is the law that protects people who buy a home that is still being built in Peninsular Malaysia. For a project sold under it, you get a standard sale agreement, a deadline for getting your keys, fixed damages if the developer is late, a 24-month defect period and a tribunal where you can claim. A project marked non-HDA is not sold under this law, and as we read it, those protections are not written in by default.

What the HDA gives you

A licensed developer with a sales permit. A developer needs a licence to build housing, and a separate advertisement and sale permit before it can advertise or sell. The permit comes from the Controller of Housing at KPKT (the Ministry of Local Government Development). The project’s approval number is often shown as the APDL.

A standard sale agreement. The developer has to use the form set by law. Schedule G is for landed homes. Schedule H is for strata homes (homes in a building split into separately owned units), such as condos.

No payment before you sign. A developer may not collect any payment, under any name, except as set out in the sale and purchase agreement (SPA). KPKT’s buyer guide says plainly that a booking fee before the SPA is signed is not allowed. You pay a 10% deposit when you sign.

A deadline for your keys. Under Schedule H, the developer must hand over vacant possession (the empty unit, ready for you) within 36 months of the SPA date. Under Schedule G, it is 24 months.

Damages if it’s late. If the developer misses the deadline, it must pay you LAD (fixed damages for late delivery) of 10% a year on the purchase price, counted day by day until you take vacant possession. KPKT says this is due even if you don’t claim it. If it isn’t paid, you have 12 months from the CCC to claim at the tribunal (see below).

A defect period. For 24 months after you take vacant possession, defects you report are the developer’s to answer for, and you can take a defect claim to the tribunal. What to check on the day you get your keys is in our getting your keys guide.

A protected project account. The developer must pay the money you pay for the home into a Housing Development Account opened for that project. The law keeps that money apart from the developer’s own property if it goes bankrupt or is wound up (closed down and its assets sold off).

A tribunal you can use. The Tribunal for Homebuyer Claims hears claims of up to RM50,000 each. How to file a claim is in our tribunal guide.

Worked example: late handover

KPKT’s own example: a RM300,000 home handed over 100 days late comes to RM8,219.18.

Deadlines for a tribunal claim

Each one is 12 months:

• LAD and other non-defect claims: from the date the CCC (the building’s certificate of completion and compliance) is issued
• Defect claims: from the end of the 24-month defect period
• If your SPA was ended before the CCC was issued: from the date it ended

Where the HDA applies

The Act covers Peninsular Malaysia, and the tribunal hears cases from Peninsular Malaysia and Labuan. Sabah and Sarawak have their own laws: Sabah’s Housing Development (Control and Licensing) Enactment 1978, and Sarawak’s Housing Development (Control and Licensing) Ordinance 2013. So a project in Sabah or Sarawak is outside the HDA.

What non-HDA means

Non-HDA means the sale is not made under this Act. The standard agreement, the key deadline, the LAD and the tribunal all come from the Act, so as we read it, a non-HDA buyer does not get them by default:

• there is no standard agreement set by law
• the handover date and any late damages are whatever your contract says
• you may not be able to use the Tribunal for Homebuyer Claims

Non-HDA is not automatically a bad buy, but more of the risk sits with you, so the contract matters more. Most projects we list are sold under the HDA, and the land title line on a project page usually says so. If it says Non-HDA, read the contract with extra care.

What to check before you sign

• Is the project sold under the HDA? The SPA should say so, and our project page usually does too.
• Does the SPA use the standard Schedule G or Schedule H form?
• Has anyone asked you for money before the SPA is signed?
• When does the 36-month (or 24-month) clock start, and when does it end?
• For a non-HDA project, have a lawyer check the handover and late-delivery clauses.

This is a general guide, not legal advice, and laws and SPA terms can change. Check your own case with your lawyer.