The Ministry of Housing and Local Government (KPKT) is targeting the introduction of an Option to Purchase (OTP) mechanism by the end of this year, giving both homebuyers and developers a window to withdraw before a sale and purchase agreement (SPA) is signed.

Housing Minister Nga Kor Ming announced the proposal on Monday after launching the National Housing Policy (DRN) 2026-2035 in Kuala Lumpur.

How The Option To Purchase Would Work

Under the proposed mechanism, a developer could withdraw from a project within a set period if sales are poor and the project looks unlikely to proceed. Buyers who had booked a unit would get their deposits back in full, along with interest.

If you change your mind during the OTP period, you could also withdraw from the purchase, though you would have to pay administrative charges and interest to the developer. Neither the length of that period nor the size of those charges has been published. Both sides would be deciding early, with developers able to test actual demand before committing further to construction and buyers still free to walk away.

The Rule Is Not Law Yet

The OTP clause is being studied under the proposed Real Property Development Bill, which has not yet been tabled or passed. Nga first raised the proposal in May at the StarProperty Awards, and the current target is to roll it out by the end of 2026.

Consumer groups have also called for safeguards around how the mechanism would work. Pertubuhan Mesra Pengguna Malaysia said developers should only be allowed to cancel during the OTP stage under strict conditions, with automatic full refunds for buyers.

The Consumer Association of Penang said it would support the mechanism if it comes with proper statutory safeguards, while also calling for wider consultation on its design and legal drafting.

For now, several details remain unknown, including how long the OTP period would last, what conditions would allow a developer to cancel, and how much buyers would have to pay if they choose to withdraw.

Why The Ministry Is Looking At Prevention

KPKT set up a special task force on sick and abandoned private housing projects in January 2023. Nga said it has since resolved 1,647 projects worth RM153 billion, covering close to 200,000 homebuyers. The ministry is targeting zero abandoned projects by 2030.

The OTP is part of a greater set of housing reforms aimed at dealing with potential problems earlier, before a project stalls and buyers are left waiting for it to be revived or rescued. Other measures include the Housing Integrated Management System (HIMS), the TEDUH housing data platform, electronic SPAs, and periodic audits of Housing Development Accounts.

What Might Change For First-Time Buyers

For a buyer, the main difference would be having a formal chance to reconsider a new-home purchase before the SPA is signed. If a developer decides that sales are too weak for the project to proceed, the OTP could allow it to stop at this earlier stage, with buyers getting their deposits back according to the terms of the mechanism. That could spare buyers from being tied to a project that later runs into financial trouble.

Developers would also have more room to assess demand before moving ahead with construction. Some projects could therefore be pulled earlier if they fail to attract enough buyers. While that may be disappointing for someone who had planned to buy a particular unit, it could be a simpler outcome than dealing with a stalled project later.

Until the Bill is tabled, none of this is settled, so a buyer cannot count on being able to withdraw. Before you pay any booking fee on a home that has not been built yet, check the developer’s licence and project record on KPKT’s TEDUH portal, and ask the sales team for the APDL number on the brochure.

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