06| Secure your home purchase: Know the HDA

When embarking on the adventurous journey of purchasing a new house from developers, we find ourselves facing higher risks compared to buying a sub-sale property. It's like traversing a treacherous jungle filled with the possibilities of abandoned projects, shoddy workmanship, and broken promises. But fear not, for the Malaysian government has donned its superhero cape in the form of the Housing Development Act (HDA) enacted in 1966 to protect the interests of us, the daring homebuyers.

But before we delve into the marvels of the HDA, let's clarify that its jurisdiction extends only to developers constructing residential properties. Think service apartments, condominiums, townhouses, and the like. Sorry, commercial enthusiasts, your retail shops and office spaces reside outside the HDA realm.

Now, here's where the HDA flexes its muscles and sweeps in to save the day. First up, we have the Mandatory Advertising Permit and Developer's License (APDL). This nifty duo ensures that developers adhere to the guidelines set by the Ministry of Housing and Local Government, preventing them from bamboozling homebuyers with false information. Transparency is key here, and if any developer dares to overpromise and underdeliver, legal action awaits!

In the spirit of transparency, developers must provide crucial information about their housing projects. We're talking the licensed developer's name, property type, build-up, materials, pricing, land tenure, total units, expected completion date, local authority overseeing the project, and whether the land is tied up with any financial institutions. Phew, that's a mouthful!

Next up, we have the Housing Development Account (HDA Account), a sacred vessel managed by developers. Once they obtain the APDL, it's mandatory for developers to open this account and deposit 3% of the estimated construction cost. All payments received from homebuyers are channeled into this account and can only be used for specific purposes outlined in the act. We even have auditors making sure everything's in order when developers renew their Advertising Permit. No funny business allowed!

The HDA Account serves multiple purposes. It acts as a filter, weeding out developers without the financial chops to embark on housing projects, avoiding any disappearing acts when financial storms brew. It also ensures that developers stick to using funds solely for development-related matters. Accountability is the name of the game, and every penny spent requires justification. Lastly, it safeguards our hard-earned money, allowing "white knights" to swoop in and rescue abandoned projects with available funds from the HDA Account.

Now, let's talk about the Prescribed Sale and Purchase Agreement (SPA). This agreement sets the stage for property transactions, locking in a developer's commitment to sell and a purchaser's commitment to purchase. The SPA is accompanied by a standard set of regulations prescribed under the HDA. No removing the homebuyer protections here, folks!

The SPA brings a slew of perks for homebuyers. From a 30-day window to secure a mortgage approval to settling progressive payments within the specified timeframe, it keeps things fair and square. Completion periods are outlined for different types of properties, ensuring developers don't dilly-dally. And if any defects rear their ugly heads within 24 months after receiving the property, homebuyers can report them to the developer. Oh, and late delivery? That calls for Liquidated Ascertained Damages (LAD), compensating for the inconvenience caused. Just remember to keep that precious receipt of your booking fee!

But wait, there's more! Homebuyers hold the ultimate trump card in the form of SPA termination. If the Controller of Housing certifies that a developer has abandoned, delayed, suspended, or ceased work for six continuous months, homebuyers can bid adieu to the agreement and seek solace in the Ministry's embrace.

All in all, it's evident that the government has put on its superhero cape to shield us, the fearless homebuyers, from potential risks. Many of us may not be aware of or understand our rights when venturing into the realm of developers, but fear not! The Housing Development Act is here to guide us through the maze and emerge victorious. Kudos to the government for their heroic efforts!