Your biggest investment is only as safe as the developer behind it

Buying a home is one of the biggest financial decisions many of us will ever make. It’s not just about monthly instalments, it’s about trusting that the developer will deliver the project, finish on time, meet quality standards and above all, honour the promises made.

If the developer fails, the consequences are real, from delayed keys and unfinished units to financial losses and long-term headaches.

There is clear evidence of developers being blacklisted by the Housing and Local Government Ministry under categories such as sick projects (where construction is delayed by more than 30 per cent compared to its scheduled progress), abandoned projects, failure to pay compounds, ignoring tribunal awards, developers being liquidated or under receivership and developers being dissolved.

So when you buy, you are not just buying a unit. You are trusting a company. And in many cases, that company has shown signs of risk.

What’s actually happening?

Here are some of the facts we know:

The ministry has announced it has blacklisted 109 developers for non‑compliance, with fines of RM9.03 million issued in 2024.

Despite the blacklists, many industry observers say that the enforcement is still weak. Blacklisting a company doesn’t always prevent its directors from starting another company under a different name.

Under the Sick and Abandoned Private Housing Project Task Force (TFST), thousands of units and hundreds of projects are under watch, showing just how widespread the problem is.

Even though many projects are being "rescued" or "revived", the fact that they were sick or abandoned in the first place tells us that risk is real.

In short, the system recognises the problem, but buying a home still involves risk and the responsibility often lands on you, the buyer.

What you should check and why

When you’re looking at a property, check the developer’s background in these ways:

Licence status: Is the developer properly licensed? Are they in good standing? The ministry gives guidance on this.

Blacklist check: Are they or their directors blacklisted? Have any of their projects been flagged for being delayed, abandoned or under receivership?

Track record of past projects: Did they complete previous projects on time? What is the quality like? Have buyers raised complaints?

Financial stability: Are there signs of trouble? Like many delayed projects, links to companies under receivership, lots of sick projects?

Transparency: Are they open about progress? Do they show you updates, audit reports, or status reports (as required by law)? If not, that’s a red flag.

Why does all this matter?

Because if the developer fails, you bear the risk. You can lose not only money, but peace of mind and your home. You don’t want to find yourself stuck in a "sick project" or worse, an "abandoned project."

Even though blacklists and regulations exist, there are still loopholes.

Some developers shore up new companies under similar ownership or directors. So even if one company is blacklisted, they start another, do another project.

The punishment for many offenders is administrative like fines, blacklisting of the company and not always criminal prosecution. That means a risk of repeat behaviour.

Some buyers feel the burden

You are doing the vetting, you are trusting the developer and if things go wrong, the buyer ends up with most of the pain.

In Malaysia’s property market today, the name of the developer matters as much as the location or the unit type. Doing your homework isn’t just sensible, it’s essential.

If you’re about to purchase, treat the developer as you would any major investment partner. Don’t assume that because the advertisement is flashy, everything is fine. Because in many cases, the warning signs are there and it pays to notice them early.

Your home is more than a property, it’s one of your most important financial commitments. Make sure the partner (developer) behind it is trustworthy, transparent and properly vetted.