Enforcement of the Housing Development (Control and Licensing) Ordinance 2013 and the Housing

Development (Control and Licensing) Regulations 2014

By

Charles Siaw

Principal Assistant Secretary

Deputy Controller of Housing

Offences Under HDO

Offences Relating To A Licence Under Section 6

Carries out housing development of more than 8 units of housing development without a licence. (Section 6(1))

Unlicenced housing developer use in relation to his business the words housing developer or any of its derivative or any other words indicating the carrying on of the business of housing development. (Section 6(3))

Offences Under HDO

Offences Relating To A Licence Under Section 6 Fails to comply with any of the conditions imposed on the

licence granted under Section 6.

Conviction: Fine of not less than RM10,000 but not exceeding RM100,000 or imprisonment not exceeding 5 years or to both. (Section 57)

Compound : RM50,000 (Regulation 27 and Regulation 29)

Offences Under HDO

Abandonment Of Housing Development Housing developer who abandons or causes to be

abandoned a housing development or any phase of housing development.

Conviction: Fine of not less then RM250,000 but not exceeding RM500,000 or to imprisonment for a term not exceeding 3 years or to both (Section 58)

Not a compoundable offence. (Regulation 27)

Offences Under HDO

Fails To Perform Duties Of A Licenced Developer

Did not within 4 weeks of making alteration in any of the documents submitted to the Controller under Section 6(4) furnish to the Controller written particulars of the alteration. (Section 10(1)(a))

Did not exhibit in the office a copy of the last audited statement and details of directors. (Section 10(1)(b))

Offences Under HDO

Fails To Perform Duties Of A Licenced Developer

Did not keep in the office such accounting and other records which will sufficiently explain the transactions and financial position of the licenceddeveloper (Section 10(1)(c))

Submit progress report of the housing development later than 21st January and 21st July of each year. (Section 10(1)(d))

Offences Under HDO

Fails To Perform Duties Of A Licenced Developer Where a licenced developer considers that he is likely to

become unable to meet his obligation to the purchasers, fails to notify the Controller of such fact in writing. (Section 10(1)(e))

Conviction: Fine of not less than RM10,000 or imprisonment not exceeding 3 years or to both and shall also be liable to a further fine of RM500 for every day during which the offence continues after conviction. (Section 59)

Compound: RM5,000 (Regulation 27 and Regulation 29)

Offences Under HDO

Offences Related to Housing Development Account (HDA)

Did not open and maintain a HDA for each housing development. (Section 12 (1))

Did not open and maintained a HDA for each phase of the housing development. (Section 12 (2))

Did not pay into HDA purchase moneys from sales of housing accommodation and any other sums which are required by regulations to be paid into HDA. (Section 12 (3)) As per Regulation 16, any loan obtained for the construction of housing accommodation shall be deposited into HDA.

Offences Under HDO

Offences Related to Housing Development Account (HDA)

Withdrawal of money from HDA which are not authorized by regulations. (Section 12 (4)) Purposes for which moneys in HDA may be withdrawn are stated in

Regulation 18.

Conditions for withdrawal of moneys from HDA are in Regulation 19.

Conditions for withdrawal of surplus moneys from Housing Development Account are in Regulation 20.

Withdrawal from HDA upon furnishing of bankers guarantee as per Regulation 21.

Conditions withdrawal of all moneys in Housing Development Account are in Regulation 22.

Offences Under HDO

Offences Related to Housing Development Account (HDA)

Not applicable where all housing accommodation will not be offered for sales before the completion of the housing accommodation and the issuance of certificate of completion. (Section 12 (9))

Conviction: Fine of not less than RM250,000 but not exceeding RM500,000 or imprisonment not exceeding 3 years or to both. (Section 12 (10))

Compound: RM250,000 (Regulation 27 and Regulation 29)

Offences Under HDO

Freezing of The Housing Development Account Controller may in writing order a freeze on the

HDA, and order the bank or finance company not to permit withdrawal of moneys from HDA. (Section 13 (1))

Any person fails to comply with the above order commits an offence. (Section 13 (3))

Conviction: Fine of not exceeding RM100,000. (Section 13 (3))

Not a compoundable offence. (Regulation 27)

Offences Under HDO

Arrangements Or Agreements of a Licenced Housing Developer

Enters into an arrangement or agreement to sell, dispose of or reconstruct his business relating to housing development without approval of the Controller. (Section 14).

Fails to comply with any conditions imposed by Controller pursuant to Section 14(2).

Conviction: Fine of not less than RM10,000 or imprisonment not exceeding 3 years or to both and shall also be liable to a further fine of RM500 for every day during which the offence continues after conviction. (Section 59)

Compound: RM5,000 (Regulation 27 and Regulation 29)

Investigation and Enforcement Duties

When the Controller or an Inspector carries out investigation and enforcement duties, housing developers are required to give their fullest cooperation.

Investigation and Enforcement Duties

In carrying out the above duties, the Controller, Inspector or any police officer have been given the following powers:-

Power to access accounting and other records. (Section 15 (3))

Powers of entry, inspection and seizure. (Section 16)

Powers to search person. (Section 18)

Power to request for translation. (Section 20)

Power to examine person. (Section 21)

Any obstruction to the above powers is an offence

Offences Under HDO

Rights of Access To Accounting and Other Records

Fails to comply with request for access to accounting and other records or fails to furnish any information or explanation . (Section 15 (3)).

Conviction: Fine of not less than RM10,000 or imprisonment not exceeding 3 years or to both and shall also be liable to a further fine of RM500 for every day during which the offence continues after conviction. (Section 59)

Compound: RM5,000 (Regulation 27 and Regulation 29)

Offences Under HDO

Obstruction and Failure To Provide Translation Obstruction to the powers of the Controller, Inspector or

Police Officer to enter, inspect and seize; and powers to search person (Section 19)

Knowingly furnish a translation which is not an accurate, faithful and true translation. (Section 20)

Obstruction to power to examine a person. (Section 21)

Conviction: Fine of not less than RM10,000 but not exceeding RM100,000 or imprisonment not exceeding 5 years or to both. (Section 26)Not a compoundable offence. (Regulation 27)

Offences Under HDO

Failure to Comply With Directions or Actions Given By the Minister

Fails to comply with any direction given or action required by the Minister under Section 27:- Take such step to rectify any matter or circumstance (Section

27(1)(a) Appoint a person to advise the Housing Developer in the conduct

of his business. (Section 27(1)(b) Direct another housing developer to take over the business of the

housing developer with a view to completing any housing development. (Section 27(1)(c)

Present a petition to the High Court for the winding up of the housing developers business. (Section 27(1)(d)

Take such actions as the Minister may consider necessary (Section 27(1)(e)

Offences Under HDO

Failure to Comply With Directions or Actions Given By the Minister

Conviction: Fine of not less than RM10,000 or imprisonment not exceeding 3 years or to both and shall also be liable to a further fine of RM500 for every day during which the offence continues after conviction. (Section 59)

Compound: RM5,000 (Regulation 27 and Regulation 29)

Offences Under HDO

Failure To Comply With General Directions Given By Minister

Fails to comply with any direction given by the Minister under Section 28.

Conviction: Fine of not less than RM10,000 or imprisonment not exceeding 3 years or to both and shall also be liable to a further fine of RM500 for every day during which the offence continues after conviction. (Section 59)

Compound: RM5,000 (Regulation 27 and Regulation 29)

Offences Under HDO Offences by Director, Manager or Secretary Section 32.

Continues to act as or hold office of a director, manager or secretary not withstanding the fact that he has become a bankrupt or suspend payment to or compounded with his creditors or is convicted with fraud or dishonesty. (Section 32 (1).

Continues to act as or hold office of a director, manager or secretary after his business has been wound up by a court . (Section 32 (2).

Conviction: Fine of not exceeding RM15,000 or imprisonment not exceeding 2 years or to both. (Section 60)

Compound: RM7,500 (Regulation 27 and Regulation 29)

Offences Under HDO

Release of Money By Stakeholder

Stakeholder who release moneys to housing developer or to any other person in contrary to provisions of sale and purchase agreement, liable to fine of not less than RM10,000 but not exceeding RM100,000 or imprisonment not exceeding 5 years or to both. (Section 61)

Not a compoundable offence. (Regulation 27)

Offences Under HDO

Progress Certification Architect or engineer who issues a progress

certification knowing that the works have not been completed, liable to fine of not less than RM10,000 but not exceeding RM100,000 or imprisonment not exceeding 5 years or to both .(Section 62)

Where the conduct of architect or engineer is prejudicial to the interest of a purchaser, the Controller may report such conduct to his respective professional body (Section 31)

Not a compoundable offence. (Regulation 27)

Offences Under HDR

False, Inaccurate and Misleading Information Gives information which is false, misleading or inaccurate

when1. Applying for a housing licence (Regulation 3(1))2. Applying for advertisement and Sale Permit (Regulation4(2))3. Issuing a brochure Regulation 5(2).

Conviction: Fine of not exceeding RM5,000 or imprisonment not exceeding 3 years or to both. (Regulation 31(1))

Compound RM2,500 (Regulation 31(1))

Offences Under HDR

Misleading Advertisement Advertisement which contains any statement ,

particulars or information that is false, misleading or inaccurate. (Regulations 31(1) (d))

Conviction: Fine of not exceeding RM5,000 or imprisonment not exceeding 3 years or to both. (Regulation 31(1))

Compound RM2,500 (Regulation 31(1))

Offences Under HDR

Failure To Comply With Conditions Imposed In Advertisement and Sale Permit

Fails to comply with conditions imposed in advertisement and sale permit (Regulations 4(3))

Conviction: Fine of not exceeding RM5,000 or imprisonment not exceeding 3 years or to both. (Regulation 31(1))

Compound RM2,500 (Regulation 31(1))

Offences Under HDR

Failure To Comply with Regulations Refuses or neglects or fails to comply or acts in

contravention of the Regulations. (Regulation 31(1)(a)) Advertisement or sale made without advertisement and

sale permit. (Regulation 4(1))

Particulars as required in Regulations 5(1) not included in the advertisement.

Contract of sale did not use Form B and Form C as in schedule (Regulation 9 (1))

Collect any payment contrary to as prescribed by the contract of sale. (Regulation 9(4))

Offences Under HDRFailure To Comply with Regulations

Refuses or neglects or fails to comply or acts in contravention of the Regulations. (Regulation 31(1)(a)) Charge more than RM150 for giving consent to assignment.

(Regulation 10(1)) Failure to submit within 14 days after the issuance of developer

licence a certificate from the bank or finance company that a Housing Development Account has been opened. (Regulation12(1))

Auditor fails to submit within 6 months after the close of financial year, annual report on Housing Development Account to Controller. (Regulation 24).

Conviction: Fine of not exceeding RM5,000 or imprisonment not exceeding 3 years or to both. (Regulation 31(1))

Compound RM2,500 (Regulation 31(1))

Offences Under HDO and HDR

Aiding Or Abetting

-Any person who aids or abets the commission of any offences under this Ordinance (Section 64) or (Regulations 31(3)) shall be liable to be punished with the punishment provided for that offence.

10 00

1

2

3

2012 2013 2014

Unlicensed Developer

No Of Case

23

29

21

0

5

10

15

20

25

30

35

2012 2013 2014

Late Renewal Of License/Permit

No. Of Case

47

64

14

0

10

20

30

40

50

60

70

2012 2013 2014

Late Submission Of Progress Report

No. Of Case

10

1

0

0.2

0.4

0.6

0.8

1

1.2

2012 2013 2014

Other Offences

No. Of Case

Conclusion

The provisions of both the Housing Development Ordinance and Regulations are comprehensive.

Enforcement of the Ordinance and Regulations will be carried out judiciously.

Ministry will strive to balance the rights of the house buyers and the interests of the housing developers.