KUALA LUMPUR: The National House Buyers Association (HBA) says homebuyers need more than proof of regulatory compliance, calling for a developer performance profile and early-warning system to help buyers assess risks before committing their life savings.
A housing developer may be licensed to sell homes, but that does not necessarily mean it has the financial strength, technical competence or track record to deliver them, said HBA honorary secretary-general Datuk Chang Kim Loong.
He said the Housing and Local Government Ministry’s Teduh (Transforming and Empowering Data Usage in Housing) portal should go beyond verifying licences and displaying project status to give prospective homebuyers a clearer picture of a developer’s ability to fulfil its promises.
The distinction is critical because buying a home is often the largest financial commitment a household makes, involving hundreds of thousands of ringgit and a contractual relationship that can extend over several years.
“Teduh may tell homebuyers whether a developer is licensed. But what they really need to know is whether that developer is Teguh — financially sound, technically competent and dependable enough to deliver the home it has promised,” Chang said.
He was commenting on the Ministry’s latest #TeduhBersama campaign, which encourages prospective homebuyers to “check before you buy”.
Chang described the campaign as sound advice and acknowledged that Teduh is a useful government initiative. The portal provides information on housing projects, developers’ licence status, Advertising Permits and Developer Licences (APDL), project progress and developments classified as delayed, sick or abandoned.
Buyers can also access certain government approvals, including extensions of time (EOTs), approved selling prices and other project-related information.
However, he cautioned that finding a valid developer’s licence and APDL on the portal should not be mistaken for assurance that a project is safe or that the developer can complete it successfully.
“A buyer who checks Teduh and finds that a developer has a valid licence and the project has a valid APDL may reasonably assume that the developer is legitimate and the project is safe.
“That conclusion, however, does not necessarily follow because being licensed does not mean being capable.
“The fundamental question a homebuyer needs answered is whether the developer is capable of completing the home properly, on time and in accordance with the Sale and Purchase Agreement (SPA),” he said.
A regulatory licence establishes the legal threshold a developer must meet to operate. It is not an insurance policy for purchasers, nor does it guarantee that construction costs will remain under control or that the developer will have sufficient cash flow throughout the development period.
Neither does it guarantee the performance of the appointed contractor, completion within the contractual period or the faithful fulfilment of every obligation under the SPA, he said.
While the Ministry’s National Housing Department explains that its licensing function is intended to ensure that only qualified and capable developers participate in the housing sector, Chang said the existence of a licence should not be interpreted as a government guarantee of future performance.
The same distinction applies to the APDL. Although obtaining a valid permit is an essential regulatory requirement, it does not certify that a developer has demonstrated the ability to complete an entire development successfully.
“This is where the limitations of Teduh become particularly important,” he said.
A DEVELOPER’S TRACK RECORD IS THE MISSING PIECE
Chang said one of the biggest gaps in the current system is the absence of comprehensive, easily accessible information on developers’ historical performance.
A genuinely buyer-centric portal should allow purchasers to look beyond the company’s current licence and the progress of its latest project to examine how it has performed across previous developments.
For a start, buyers should be able to establish how many housing projects a developer has completed, how many were delivered on time, how many were delayed and how many required EOTs.
They should also be able to identify developments classified as late or sick, as well as those that were abandoned.
The assessment, he said, should not be confined to the company named in the SPA or listed as the developer of a particular project. It should also provide relevant information on whether the developer, its directors or individuals exercising administrative control have previously been associated with abandoned or problematic developments through other companies.
Other indicators include the number of complaints lodged against a developer, tribunal and court proceedings involving homebuyers, repeated changes of contractors or architects, and a history of delayed vacant possession.
Buyers should also have access to aggregated information on recurring defects and unresolved complaints during the Defect Liability Period (DLP), the number of previous projects that obtained a Certificate of Completion and Compliance (CCC), and relevant breaches of statutory or contractual obligations.
A developer’s experience is another important consideration. Is it an established player with a proven record of delivering housing projects, or a relatively new entrant with little or no completed development history?
This is particularly relevant because developers frequently establish subsidiaries or associated companies to undertake individual projects.
Although these entities may be treated as separate legal entities, buyers should not be left without information about the experience and track record of the wider corporate group or the individuals exercising control over them, where such information can lawfully be disclosed.
The underlying concern is that a project may appear to be progressing normally while the developer’s financial or organisational capacity remains difficult for an ordinary purchaser to assess.
“When a buyer signs an SPA, he or she is not simply purchasing four walls, a roof and a parcel of land. The buyer is entering into a long-term contractual relationship with the developer.
“The developer has obligations relating to construction, specifications, common facilities, infrastructure, vacant possession, statutory compliance, defect rectification and other contractual matters,” Chang said.
A project classified as progressing today does not establish whether the developer will retain the financial and organisational capacity to complete it tomorrow.
Housing development is a long-duration business, and a developer’s financial position, construction arrangements and operational circumstances can change substantially between the signing of the SPA and delivery of vacant possession.
TEDUH 2.0 SHOULD INTRODUCE DEVELOPER PERFORMANCE PROFILES
To address the information gap, Chang proposed that the Ministry develop a more comprehensive version of Teduh, featuring a developer performance profile for each developer.
The Ministry already has access to substantial information through its regulatory and administrative systems. Teduh itself draws private housing development information from the Housing Integrated Management System (HIMS).
The challenge, he said, is to make this information more meaningful, accessible and useful to prospective purchasers.
A future Teduh 2.0 should provide a transparent historical record covering developers’ current and previous licences, APDL records and project completion performance, including the number of developments completed, delayed, classified as sick or abandoned.
It should also disclose the number and duration of EOTs granted, allowing buyers to compare contractual completion dates with actual vacant possession dates and, where relevant, the subsequent issuance of individual or strata titles.
On construction quality, the portal could provide aggregated information, where legally permissible, on unresolved purchaser complaints, recurring defects and issues arising during the DLP.
The profile should also include relevant regulatory enforcement actions, prosecutions and convictions relating to housing development, alongside aggregated information on Tribunal and court proceedings involving purchasers.
Corporate information is equally important. Where legally and practically possible, purchasers should be able to identify the actual entity undertaking a development and understand its relationship with the parent company, subsidiaries, associated companies and individuals exercising administrative control.
Such disclosure would help buyers identify patterns of delays, repeated EOTs, abandoned developments and unresolved defects, while encouraging developers to maintain higher standards of accountability.
Chang said the information must be verified and presented with appropriate safeguards for privacy, commercial confidentiality and due process. Complaints and pending proceedings, for instance, should not be portrayed as proven wrongdoing, and developers should have a fair opportunity to correct inaccurate information.
The objective is not to penalise developers but to equip purchasers with a more complete picture of the risks involved before they commit to a property purchase.
EARLY WARNINGS, NOT JUST REPORTS AFTER PROJECTS TURN SICK
Beyond historical performance, Chang said Teduh should also incorporate an early-warning mechanism to identify potential problems before developments deteriorate into delayed, sick or abandoned projects.
He suggested that the Ministry examine how declarations under Form 7(f) of the housing law could contribute to such a system.
An objective risk-indicator framework could alert prospective purchasers to emerging concerns, rather than requiring them to wait until a project is officially classified as late or sick before recognising the danger.
Any such system, however, must be based on clear, verifiable criteria and a transparent process. It should not amount to a government guarantee of a developer’s performance or unfairly prejudice a developer’s commercial interests.
Nevertheless, providing buyers with timely information on material risks would be more meaningful than simply displaying a licence number and the latest construction status.
“Consumer protection should not be limited to informing buyers after the damage has been done that a project has become delayed or sick. The purpose should be to provide sufficient information to help them assess the risks before committing their life savings,” Chang said.
‘CHECK BEFORE YOU BUY’ MUST COME WITH BETTER INFORMATION
Chang said the Ministry was right to encourage prospective purchasers to conduct due diligence, but the campaign must not inadvertently shift the burden of assessing complex commercial and technical risks entirely onto consumers.
A first-time homebuyer is not a forensic accountant, property lawyer, engineer or corporate investigator.
A young couple buying their first home cannot reasonably be expected to determine a developer’s financial resilience simply by checking a government portal. Nor should accessing Teduh automatically be taken to mean that a purchaser has completed meaningful due diligence.
A government portal should reduce the information imbalance between developers and purchasers, not merely direct consumers to the minimum statutory information available.
HBA welcomes initiatives that encourage buyers to verify developers’ credentials and check project status before signing an SPA. However, regulatory compliance must not be confused with commercial competence.
Teduh should be the first checkpoint, not the final verdict, Chang said.
The government’s responsibility cannot end with telling consumers to “check before you buy”. If the Ministry wants Teduh to become a more powerful instrument of consumer protection, its next generation must answer the question that matters most: Has this developer demonstrated the financial strength, technical competence and track record to deliver what it has promised?
Ultimately, homebuyers are not purchasing a licence, an APDL or a project number displayed on a government portal. They are buying a home and placing their family’s financial future in the hands of a developer.
They deserve more than a checklist. They need the developer’s track record, the warning signs and the information necessary to judge the risks.
Only then can “check before you buy” become meaningful consumer protection rather than another exercise in ticking boxes.