Myth Buster

Scenario

Alex intends to purchase a double-storey shop house. When requested for the number of developer license, the developer’s salesperson informed that the double-storey shop house is a commercial property. Hence, the sale and purchase agreement is not governed under the Housing Development (Control and Licensing) Act 1966 (“HDA“).

Alex is confused, as he read in a home-buying forum that all developers must obtain a developer license for their development projects.

Mythbusted.

Pursuant to HDA, the developer who carries or engages in any business of constructing or developing more than 4 units of any building which is intended for human habitation or partly for human habitation and partly for business premises in Peninsular Malaysia must possess a valid developer license.

Despite, developers are not required to obtain developer license under HDA:

  1. for development projects purely for commercial or industrial use; and
  2. for development projects intended for human habitation but the entire project is constructing not more than 4 units of property.

In Alex’s case, for a double-storey shop house which is intended partly for human habitation and partly for business premises, if the developer is constructing more than 4 units of the said shop houses within the same development, the developer is governed by HDA of which developer’s license must be obtained.

So, how much did you know about this Legal Myth?

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