Housing Ministry Reviews Act 118 To Protect Homebuyers From Abandoned Projects

Samuel Chua

28th October 2025 - 2 min read

The Ministry of Housing and Local Government (KPKT) is reviewing the Housing Development (Control and Licensing) Act 1966 (Act 118) to strengthen its enforcement powers. The proposed amendments include introducing travel restrictions for blacklisted developers and company directors involved in abandoned housing projects.

Strengthening Protection For Homebuyers

Deputy Minister of Housing and Local Government, Datuk Aiman Athirah Sabu, said the review is crucial to address abandoned housing projects more effectively and to protect the interests of homebuyers nationwide.

As of 30 September 2021, a total of 107 private housing developments have been declared abandoned under Act 118. These projects involve 29,587 housing units and affect 15,553 buyers.

Once a project is confirmed as abandoned, the ministry blacklists the developer and the company’s board members. Those blacklisted are barred from applying for new housing licences, and their Housing Development Accounts (HDA) are frozen.

Measures To Restore Confidence

Aiman Athirah noted that between December 2022 and September 2025, the government successfully revived around 60 abandoned housing projects nationwide. These recoveries were achieved through KPKT-led collaboration with developers, financial institutions, and other stakeholders.

The ministry coordinates meetings between original and rescue developers, liquidators, and banks to facilitate solutions for affected buyers. When a project is successfully revived, homebuyers may be refunded or assisted through financial restructuring.

Financial Relief And Buyer Support

KPKT also intervenes by issuing resolution letters to financial institutions, recommending that they lower or waive interest rates and restructure buyers’ loans. In addition, affected buyers may apply for a second withdrawal from their Employees Provident Fund (EPF) accounts to help ease repayment burdens.

Those who qualify can apply for new financing, including first-time housing loans or an interest-free loan at four percent for up to five years, subject to approval by the Public Sector Housing Financing Board.

Exploring A Buyer Protection Fund

In response to a question on whether a guarantee scheme or special fund will be created to safeguard homebuyers from losses in abandoned projects, Aiman Athirah confirmed that the proposal is under consideration.

She said the idea forms part of the broader review of Act 118, which aims to provide stronger legal and financial protection mechanisms for homebuyers across Malaysia.

For those exploring home financing options, you can compare the latest home loans in Malaysia to find one that best suits your needs.

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