Buying an Under-Construction Property in Malaysia: 6 Things to Check Before You Sign

When you buy a property that is still being built in Malaysia, you pay in stages as construction progresses and collect the keys two or three years later. What protects you in the meantime is the Housing Development Act: the developer needs a licence and an advertising and sales permit, the agreement must follow a government-prescribed form, and delivery has a deadline with compensation if it is missed. Check these six things before you sign.

1. Are the developer’s licence and permit valid?

The Ministry of Housing and Local Government’s first tip for buyers: the developer must hold a valid developer’s licence and a valid advertising and sales permit.

National Housing Department rules require every advertisement to show the licence number and validity, the permit number and validity, the developer’s name and address, and the line "IKLAN INI TELAH DILULUSKAN OLEH JABATAN PERUMAHAN NEGARA". Permits run for 3 years on Schedule H (strata) projects and 2 years on Schedule G (landed) projects.

Projects and developers can be looked up on the Ministry’s TEDUH system. Every project page on this site lists the permit number and where it came from.

2. Is the title clear?

The National Housing Department tells buyers to check whether the land is freehold or leasehold (and when a lease expires) and whether it is Malay reserve land; the brochure must also state whether the land is charged to a bank. Our freehold vs leasehold guide explains the difference.

3. Is the agreement on Schedule G or Schedule H?

When you buy from a licensed developer before completion, the agreement must follow the statutory form: Schedule G for landed homes, Schedule H for strata units. The payment stages, delivery deadline, late-delivery damages and defect liability period in those forms cannot be altered by the developer.

4. How is the money paid?

• No money may be collected before the sale and purchase agreement is signed. (National Housing Department FAQ)
• 10% of the price is paid on signing, and that day is the date of the agreement.
• After that you pay by construction stage, and each claim must carry a certificate from the developer’s architect or engineer.

The percentage for each stage is in our guide to Schedule H progressive billing. The National Housing Department also approves a build-then-sell 10/90 format: 10% on signing and 90% at vacant possession.

5. When will it be delivered, and what if it is late?

On strata projects, common facilities also have a completion deadline, with damages at 10% a year on the last 20% of the price if they are late. Late-delivery damages can be deducted from instalments you have not yet paid. Our SPA guide covers the delivery clause, the damages formula and the payment schedule in full.

6. What if the project stalls?

The National Housing Department treats a project as abandoned when there has been no significant work on site for 6 continuous months, or it is not finished within the agreement period, and the Minister confirms it under section 11(1)(ca) of the Housing Development Act.

Buyers of a confirmed project can obtain a confirmation letter from the department to ask their bank to restructure the loan or to make a second EPF withdrawal, among other uses. Claims against the developer must be brought within the six-year limitation period from signing. The Ministry’s TEDUH system also publishes lists of abandoned and problem projects.

That is why checking a developer’s previous projects before you sign is a step worth taking.

Related

• Progressive billing: the Schedule H payment stages
• What the HDA protects
• Buying a completed project from the developer

Sources

1. Ministry of Housing and Local Government, "Tips Untuk Pembeli Rumah": licence, permit, land status, late delivery, defect liability. Document
2. National Housing Department, "Tips Kepada Pembeli Rumah" (updated 21 August 2019): brochure contents, 10% first payment, delivery periods and conditions. Page
3. National Housing Department, enforcement FAQ (updated 7 October 2023): licence and permit, no payment before signing, late delivery damages. Page
4. National Housing Department, Guidelines on Applying for an Advertising and Sales Permit (updated 20 February 2025): required advertisement details, permit validity, BKJ 10/90. Document
5. National Housing Department, abandoned project rehabilitation division (updated 23 October 2023) and FAQ: definition, confirmation letter, limitation period. Page
6. Housing Development (Control and Licensing) (Amendment) Regulations 2015, P.U.(A) 106/2015: Schedule G clauses 24 and 26; Schedule H clauses 25, 27 and 29. Document

The above reflects Ministry guidance and the statutory form of agreement; the agreement you sign governs. Last verified: 11 October 2026.