Higher deposit to ensure developers are committed

This is really good news for property buyers!

The increased deposit to obtain a housing development licence from RM200,000 to 3% of the project’s estimated cost is to ensure developers are committed to building homes.

Housing and Local Government Minister Datuk Seri Chor Chee Heung said the higher deposit would see only those with sufficient financial resources take up projects.

“We want only those with solid financial ability to build houses unlike now when all one needs is RM200,000 as deposit, a company and a piece of land and you are a developer already.

“The 3% deposit is high but should not be a problem to anyone who is serious in this business,” he said after officiating at the ministry’s Innovation Day here.

The ministry tabled in Par­liament on Wednesday for first reading a Bill amending several clauses of the Housing Deve­lopment (Control and Licensing) Act to further tighten the law, including on the higher deposit.

Other amendments include a fine of up to RM500,000, jail of up to three years or both for developers who fail to complete their projects.

The Bill also states that it is an offence if a developer “abandons or causes to abandon a housing development” and the developer is deemed to have abandoned a project if he refuses to complete it, delays, suspends or ceases work continuously for six months or beyond a period stipulated under the Sales and Purchase Agreement.

Chor said the stiffer penalties were to ensure that developers did not simply abandon projects. - By The Star