New Housing Regulations 2014

Announcement

ENFORCEMENT OF THE NEW HOUSING DEVELOPMENT (CONTROL AND LICENSING) ORDINANCE, 2013 AND HOUSING DEVELOPMENT (CONTROL AND LICENSING) REGULATIONS, 2014.

31 Oct 2014

Kindly be informed that the State Government through the Ministry of Housing Sarawak will enforce the new Housing Development (Control and Licensing) Ordinance, 2013 and Housing Development (Control and Licensing) Regulations, 2014 with effect from 1st November 2014.

1. The main purposes of the changes and improvements to the previous Ordinance and Regulations are as follows:

1.1 The need to strike a balance between the interests of house buyers with that of housing developers in an equitable and fair manner;

1.2 To further enhance and safeguard house buyers’ interests;

1.3 To minimize overall compliance cost;

1.4 To simplify housing regulatory procedures towards reducing red tapes and creating more-business-friendly environment;and

1.5 To mitigate the occurrence of abandoned housing project in the State.


2. The key changes in the new Regulations and Ordinance are highlighted below:

Housing Development Regulations

2.1 The Controller of Housing, in consultation with the Minister is empowered to determine the licensing requirements, fix and vary the deposit if the amount is deemed insufficient, and improvise the Housing Development License and Advertisement and Sale Permit Application Form from time to time;

2.2 Clause 3(2)(a)(i): The licensing criteria has been revised wherebya minimum paid-up capital of RM100,000.00is required if the application is made by a company;

2.3 Clause 3(3): For a project more than 8 unit and less than30 units, the deposit shall be RM100,000.00. The deposit is fixed atRM200,000.00 for a project more than 30 units and up to 100 units. For a project more than 100 units, an amount equivalent toone and half per centum (1.5%) of the estimated cost of construction but up to a maximum of RM500,000.00, whichever is higher, shall be paid as a deposit for the license to be issued. The deposit shall be paid by way of bank guarantee or paid into the Housing Development Account (HDA). If the deposit is paid into the HDA, the housing developer shall furnish a copy of the bank-in slip and the Certificate from the bank (as per attached sample) upon receiving the conditional approval letter from the Controller of Housing Sarawak;

2.4 Clause 3(5) and Clause 4(5): The licensing and advertisement and sale permit fees have been revised to synchronize them with the new licensing requirements as follows:

2.5 Clause 10(11): Letter of Consent to resell shall be charged with an administrative fee not exceeding RM150;

2.6 Clause 24: Every auditor of licensed housing developer shall, within six (6) months after the close of the financial year of such developer, make an annual report to Controller as to the Housing Development Account and shall state in every such report whether or not in his opinion –

(a) each and every deposit and withdrawal recorded in the account are in accordance with these Regulations:

(b) the accounting and the records examined by him are properly kept; and

(c) if the auditor has called for an explanation or information from the officers or agents of the developer, such explanation or information has been satisfactory.

2.7 Section 7(a), Clause 13(c) and Clause 3(3): The housing developers are required to deposit the money and keep the balance as prescribed under the Housing Development (Control and Licensing) Regulations, 2014 as follows if they choose to pay the deposit into the HDA:

Sale and Purchase Agreement (Form B and Form C)

2.8 Clause 7 of the Sale and Purchase Agreement: The vendor shall not charge interest on late payment of any installment if the delay in payment is due to specific situations;

2.9 Clause 13(2) of the Sale and Purchase Agreement: The vendor shall construct all the infrastructure works at its own cost and to get Appropriate Authority to take over the completed facilities, otherwise, they are responsible for the maintenance and repair of these facilities at an apportioned cost;

2.10 Clause 17 of the Sale and Purchase Agreement: The purchaser shall not be liable to indemnify the vendor for introduction of new laws or amendment of existing laws which shall impose on the vendor additional fee or taxes for payment for completing the housing project;

2.11 Clause 18 of the Sale and Purchase Agreement: For landed building, if vendor fails to deliver vacant possession, he shall be liable to pay the purchaser damages calculated from day to day at the rate of three per centum (3% )per year of the purchase pricefrom expiry of delivery of vacant possession. For Strata-titled building, the rate has been reduced from ten per centum (10%) to eight per centum (8%);

2.12 Clause 22 of the Sale and Purchase Agreement: Defect liability period is fixed at eighteen (18) months after the date when the purchaser takes vacant possession;

2.13 Clause 26: For strata-titled building, the rate for Liquidated Ascertained Damage for failure to complete the common facilities in time has been revised from “10% per annum on the amount of purchase price paid to date by the purchaser” to “an amount to be calculated from day to day at 10% per annum of the last 20% of the purchase price”;

2.14 The Third Schedule or progress payment for housing development has been revised to suit current industry need. This includes ten per centum (10%) payment of purchase price to the developer upon signing of the Sales and Purchase Agreement;

Housing Development Ordinance

2.15 Section 3: Abandoned housing development means housing development which has been abandoned as declared by the Minister under section 27(2);

2.16 Section 12: Where a housing development is to be developed in phases, the licensed housing developer shall open and keep a HDA for each phase of such development. All purchase moneys received by the licensed housing developer from the sales of housing accommodation and any other sums of money which are required by regulations shall be paid into the HDA. The developer shall not withdraw any money from HDA except as authorized by Regulations (please see Clause 18, Clause 19, Clause 20 and Clause 22 for details of the HDA withdrawal and other requirements. Any licensed housing developer who contravenes this provision commits an offence and on conviction, be liable to a fine of not less than RM200,000.00 but not exceeding RM500,000.00 or to imprisonment for a term not exceeding three (3) years or to both;

2.17 Section 12(1), Clause 12(1) and Clause 24: The housing developer shall be required to open the HDA within fourteen (14) days after the issuance of a housing developer’s license and shall submit a copy of the bank-in slip/bank statement and the Certificate from the bank (as per attached sample) upon payment. The developer’s appointed Auditor shall submit an annual report of the Housing Development Account (HDA) within six (6) months after the close of the financial year based on the attached format;

2.18 Section 12(10): Licensed housing developer to open and maintain Housing Development Account (HDA). Any licensed housing developer who contravenes this section commits an offence and shall, on conviction be liable, to a fine of not less than two hundred and fifty thousand ringgit or to imprisonment for a term of not exceeding three years or to both;

2.19 Section 58: A housing developer who abandoned or causes to be abandoned a housing development or any phase of housing development shall commit an offence and shall, on conviction, be liable to a fine of not less than two hundred and fifty thousand ringgit but not exceeding five hundred thousand ringgit or to imprisonment for a term of not exceeding three years or to both.


3. Renewal of Housing Development License is not required upon Occupation Permit being issued by the Local Authority. However, termination of Banker’s Guarantee shall only be considered after the expiry of project defect liability period.

4. Housing Development License shall be issued for a three (3) year period for landed property and four (4) year period for high-rised building (This would avoid the need to renew the license or permit every year and thus, saving time and cost).

5. Developers shall be given the option to choose whether to submit their application for Housing Development License and Advertisement and Sales Permit separately as is the current practice or submit simultaneously provided that the project has been approved by the State Planning Authority and Building Plan has been approved by the Local Authority respectively.

6. The enforcement of the above Ordinance and Regulations shall be applicable to all new housing development applications that are submitted on 1st November 2014 and thereafter.As such, from then onwards, all new housing development projects must use the new Sale and Purchase Agreement (Form B and Form C) with their house buyers.

7. The new application forms for both Housing Development License and Advertisement and Sale Permit respectively can be downloaded from the Ministry of Housing Sarawak’s website (http://www.minhousing.gov.my) without any fees.

8. The new Housing Development (Control and Licensing) Ordinance, 2013 and Housing Development (Control and Licensing) Regulations, 2014 can also be downloaded from the Ministry of Housing Sarawak’s website (http://www.minhousing.gov.my) or from the State Attorney General’s website (http://sag.gov.my).

9. Attached herewith is a copy of the penalty/compound Table Summary for your attention please.

10. In view of the above enforcement, we would like to urge that the Company Directors, Management, and staff concerned to fully familiarize themselves with all the provisions and requirements in the new Ordinance and Regulations as non-compliance would subject the company to imposition of compound/penalty including imprisonment.

11. Should you have further queries on the above, please kindly liaise with Mr. Charles Siaw(charles@sarawak.gov.my)or Puan Azzilla Sitam(azzillas@sarawak.gov.my) at tel. no. 082-445839.

(Source - Sarawak Ministry of Housing)