Abandoned housing projects in Malaysia (2026): what counts, buyers’ rights, loans and what to do

中文 · Bahasa Melayu · Bahasa Indonesia

By Jason Lim, REN 84424 · IQI Realty · Checked on 9 November 2026

This guide is for Malaysians and buyers from Singapore, Indonesia, India, China and MM2H who want to understand stalled housing projects, before booking a new launch in Johor or because their project has slowed down. The short answer: the housing ministry (KPKT) sorts troubled private projects into delayed, sick and abandoned, and only the ministry can confirm a project as abandoned. Buyers of licensed housing projects have real protections under the Housing Development Act, but rescues take time and your housing loan keeps running, so early, calm action matters.

Delayed, sick or abandoned: what the terms mean

Officially, KPKT and its National Housing Department (Jabatan Perumahan Negara, JPN) use three categories for private housing projects (projek perumahan swasta):

Status	Criteria used	What it usually means for buyers
Delayed (lewat)	Site progress is 10% to 30% behind the planned schedule	Watch closely; the delivery date may still be met or extended
Sick (sakit)	More than 30% behind schedule, or the SPA delivery period has expired	Late delivery is likely; late-delivery damages may be building up
Abandoned (terbengkalai)	Not completed within the SPA period with work stopped for six months or more, or the developer is being wound up or is under a receiver and manager; the developer admits in writing it cannot continue; and the minister confirms it under section 11(1)(ca) of Act 118	A rescue needs a new plan, new money and often a new party to finish the work

The law has its own, separate test. Section 18A of the Housing Development (Control and Licensing) Act 1966 (Akta Pemajuan Perumahan (Kawalan dan Pelesenan) 1966, Act 118) makes it an offence for a licensed developer to abandon a project, and defines “abandons” as stopping or delaying work continuously for six months or more, or going beyond the completion period in the SPA. The penalty is a fine of at least RM250,000, up to three years’ jail, or both. Under section 22, directors and officers can be treated as guilty of the developer’s offence unless they prove it happened without their consent and that they used due diligence.

How many projects are affected in 2026?

The numbers move as projects are rescued and others slip:

Date (KPKT figures)	Delayed	Sick	Abandoned	Reported by
30 September 2025	–	–	107 (15,553 buyers)	RTM, 27 October 2025
31 December 2025	161	349	99	RTM, 30 January 2026
30 June 2026	–	303 (43,288 units)	100 (27,998 units, 14,961 buyers)	Sinar Harian / Bernama, 29 July 2026

• Where: at 30 June 2026 Selangor had the most abandoned projects (41), followed by Kelantan (13) and Terengganu (11); the published reply did not give a Johor figure.
• Rescues: KPKT says 1,726 troubled projects with 199,643 units were revived from 2023 to August 2026, including 37 abandoned projects (Bernama, 14 October 2026).
• Unlicensed developers: Khazanah Research Institute counted 175 further abandoned projects by unlicensed developers in October 2024, affecting 5,760 buyers, which is one reason a licence check matters.
• Johor: in February 2024 the state housing committee chairman said Johor aimed to resolve five sick projects and one abandoned project that year, in Muar, Kulai, Johor Bahru and Tangkak (Sinar Harian, 21 February 2024).

Common causes include construction costs rising faster than the original selling prices (KPKT’s secretary-general put the recent rise at about 20% to 40% in May 2026), contractor or landowner disputes and weak cash flow.

Protections you already have as a buyer

These apply to housing projects regulated under Act 118, which covers developments of more than four units of housing in Peninsular Malaysia, Johor included. They do not apply in the same way to commercial-title projects such as shop lots and offices.

Protection	What it does	Where it comes from
Housing Development Account (HDA)	Your payments go into a project account with restricted withdrawals. If the developer is wound up, that money is not treated as its property.	Act 118, section 7A
Statutory SPA	Vacant possession within 24 months (landed, Schedule G) or 36 months (strata, Schedule H), with late-delivery damages of 10% a year of the price. Progress payments are tied to stages certified by the developer’s architect or engineer.	Housing Development (Control and Licensing) Regulations 1989, Schedules G and H
Termination after six months of stopped work	You may end the SPA if work stops for a continuous six months or more, with your bank’s written consent (which it may not unreasonably withhold) and the Controller of Housing’s certification. The developer must refund all money paid, without interest, within 30 days.	Act 118, section 8A (SPAs made after the 2012 amendment, Act A1415, came into operation)
Tribunal for Homebuyer Claims	Hears SPA-based claims of up to RM50,000, generally within 12 months of the CCC, the end of the defect period or the termination of the SPA, and aims to give its award within 60 days of the first hearing.	Act 118, sections 16M, 16N and 16Y
Ministerial powers	The minister can direct fixes, appoint an adviser, direct a takeover, certify the project abandoned or direct a winding-up.	Act 118, section 11

A section 8A refund depends on the developer being able to pay, and late-delivery damages are a claim, not money in hand. My guides to late vacant possession and LAD claims, the SPA explained and the new launch progressive payment schedule go into the details.

What KPKT does when a project stalls

• Task force: KPKT’s Task Force for Sick and Abandoned Private Housing Projects (TFST), set up in January 2023, brings developers, buyers, banks and agencies together to agree a way forward (RTM, 30 January 2026).
• Rescue parties (“white knights”): most revivals depend on a private developer or contractor taking over, checking the structure and re-costing the remaining work at today’s prices; banks usually need a creditworthy party before releasing frozen financing (The Star, 27 September 2026).
• Government revival funding: a few projects are revived with public money through JPN and state housing boards. RM267.5 million had been spent by November 2025, and the 2026 allocation was RM25.84 million for nine projects. Only projects with homes at RM300,000 or below, over 50% sold and over 70% physical progress qualify, and revival takes one to five years (RTM, 20 November 2025).
• Stamp duty for rescues: Budget 2027 proposed a full stamp duty exemption on loan agreements and transfers between rescue developers or contractors and the original buyers, from 1 January 2027 to 31 December 2030, subject to KPKT certification (The Star, 1 November 2026). Treat it as proposed until gazetted.
• Tougher enforcement: in October 2025 KPKT said it planned to blacklist errant developers and directors, with travel bans, no new licences and frozen HDAs (RTM, 27 October 2025).
• New law: a Real Property Development Act to replace Act 118 and extend oversight to some commercial developments was in its final drafting stage in July 2026, with no tabling date given (Bernama, 31 July 2026). An option-to-purchase step before the SPA and an “order to build” model were still being studied in November 2026.

Your housing loan during a stall

General information, not financial advice; confirm with your bank.

• The loan does not pause by itself. Your bank releases money stage by stage, and you pay interest, and later full instalments, on the released amount even while the home is unfinished (The Star, 1 November 2026).
• Ask about restructuring. In February 2023 the minister said JPN would issue support letters that buyers of troubled projects can use when they ask their bank to restructure the loan (The Edge Malaysia, 16 February 2023). Whether and how a bank restructures is its own decision.
• Do not simply stop paying. Missed instalments lead to arrears and late charges. If cash is tight, AKPK, the credit counselling agency set up by Bank Negara Malaysia, offers counselling and help with restructuring debts at no fee. See my guide to missed home loan payments.
• Terminating needs the bank. Section 8A requires the bank’s written consent; ask how a refund would be applied to your loan.
• Check your insurance. Ask your insurer how an MRTA or MLTA policy is affected if the SPA is terminated or the loan restructured. See MRTA vs MLTA.

Warning signs before you book, and while it is being built

Before you book

• No licence or advertising and sales permit (APDL) number, or numbers that do not match KPKT’s TEDUH portal.
• A delayed, sick or abandoned status on TEDUH for this project or the group’s earlier ones.
• No completed project you can visit.
• A commercial-title project without a statutory Schedule H SPA or an HDA. See serviced apartments on commercial title.

My step-by-step guide to checking a developer before buying a new launch covers these checks in detail, and the sales gallery checklist lists what to ask on the day.

After you have signed

• Long gaps between progress bills. Each bill follows a certified stage. If months pass with no new bill when the schedule says otherwise, ask why.
• A quiet site. Fewer workers, cranes not moving, materials not arriving. Visit or ask someone to send dated photos.
• TEDUH progress falling behind the stage you have been billed for, or an extension of time you were not told about.
• Silence from the developer on simple questions.

If your project has already stalled: what to do

General information, not legal advice; speak to a lawyer about your own SPA.

1. Check the official status. Look up the project on TEDUH and note whether it is listed as delayed, sick or abandoned, with the date.
2. Gather your papers. SPA, booking receipt, every progress bill and receipt, loan offer and agreement, insurance policy, and all letters and messages from the developer.
3. Write to the developer. Ask for the progress, the reason for the delay and a revised completion date.
4. Contact KPKT. Lodge a complaint with JPN through TEDUH, and ask whether the project is with the task force and whether a support letter is available.
5. Talk to your bank. Explain the situation before any instalment is missed, and ask what options it has.
6. Connect with other buyers. A buyers’ group can share one lawyer and speak to KPKT with one voice.
7. Get legal advice on your options. These can include waiting for a rescue, a section 8A termination, a late-delivery damages claim at the Tribunal for Homebuyer Claims or in court, or filing a claim with the liquidator if the developer is wound up.
8. Be careful with new payment requests. If anyone asks for money to “restart” the project, confirm it with KPKT and your lawyer first. My property scams guide has more.

Rescue terms may change the completion date, specifications or payments; read any new agreement with your lawyer. When keys come, use my vacant possession and defect checklist and check the CCC.

Extra points for foreign buyers

• Same protections, extra steps. Act 118 protects you too. Your purchase also needs Johor state consent, and foreigners can generally buy Johor residential property only from RM1 million, with some exceptions in designated zones (New Straits Times, April 2026). See Johor’s foreigner minimum price and quota.
• Refunds are in ringgit, so keep a Malaysian bank account open. See paying for Johor property from abroad.
• Acting from abroad. Keep copies of everything and consider a lawyer or power of attorney for meetings you cannot attend. My guide to buying JB property without flying in covers signing and paying from overseas.
• Completed homes remove the build risk. If you need certainty for a job move, schooling or MM2H, a completed home may suit you better. For MM2H, I coordinate with a MOTAC-licensed MM2H agent on the visa side and handle the property side; approval is decided by the authorities. See MM2H property support.

Where to buy if this matters to you

If build risk worries you, start with completed or near-complete homes, or with new launches where the checks above come back clean:

• Completed JB homes near the Causeway: ready homes you can inspect before you pay.
• New launch vs subsale: how the risks and costs compare.
• New launch property in Johor Bahru: current launches to run through the checks.
• JB Sentral and Bukit Chagar: near the CIQ and the RTS Link station.
• Iskandar Puteri: Medini, EduCity and the Second Link.
• Mount Austin: an established family area with condos and landed homes.

Compare areas on my JB property map, and see how I verify projects.

More Johor living guides: Check a developer before buying · Late vacant possession and LAD · Booking fee refunds · Land title search and caveats

Frequently asked questions

What is an abandoned housing project in Malaysia?

It is a private housing project that KPKT has confirmed as abandoned, typically because work stopped for six months or more past the SPA period or the developer is being wound up, and the minister certifies it under section 11(1)(ca) of Act 118. Projects more than 30% behind schedule are called sick.

How many abandoned housing projects are there in Malaysia?

KPKT recorded 100 abandoned and 303 sick private housing projects in Peninsular Malaysia at 30 June 2026, with 14,961 buyers in the abandoned projects. Selangor had the most abandoned projects, followed by Kelantan and Terengganu.

Do I still have to pay my housing loan if the project is abandoned?

Usually yes. The loan agreement with your bank continues, and you pay interest on the amount already released to the developer. Talk to your bank early about restructuring and ask KPKT whether a support letter is available.

Can I cancel my SPA if the developer stops work?

Under section 8A of Act 118, buyers under SPAs made after the 2012 amendment can terminate if work stops for a continuous six months or more, with the bank’s written consent and the Controller of Housing’s certification. The developer must refund money paid within 30 days, without interest.

Who rescues abandoned housing projects in Malaysia?

KPKT’s task force coordinates rescues. Most are done by private rescue developers or contractors; a smaller number of low-cost projects are revived with government funds through the National Housing Department and state housing boards.

How can I check if a project is sick or abandoned before buying?

Search the developer and project on KPKT’s TEDUH portal, which shows the licence, advertising and sales permit, progress and any delayed, sick or abandoned status. Also visit the developer’s completed projects and the site itself.

Want a project checked before you book?

Send me the project name and area. I will check its status and the developer’s record on TEDUH, look at the developer’s completed projects in JB and tell you what to confirm with your lawyer before any money moves. If you are in a stalled project and need a home meanwhile, I can help you find a rental or a completed unit. You can also book an appointment, or a Zoom consultation if you are abroad.

Sources: The Star, “Abandoned projects: No easy fix”, 1 November 2026; Sinar Harian (Bernama), KPKT written reply on sick and abandoned projects as of June 2026, 29 July 2026; Bernama, KPKT revival figures up to August 2026, 14 October 2026; Berita RTM, TFST figures as of 31 December 2025, 30 January 2026; Berita RTM, KPKT to strengthen enforcement against errant developers, 27 October 2025; Berita RTM, RM267.5 million spent on reviving abandoned housing projects, 20 November 2025; Khazanah Research Institute, “Abandoned Housing: An Unfinished Dream”, 23 December 2024; Bernama, KPKT secretary-general on construction costs and abandoned projects, 15 May 2026; The Star, “Malaysia needs more white knights”, 27 September 2026; The Edge Malaysia, buyers of ailing projects can seek loan restructuring with government support letters, 16 February 2023; Bernama, Real Property Development Act in final drafting stage, 31 July 2026; Sinar Harian, Johor sick and abandoned projects to be resolved in 2024, 21 February 2024; Housing Development (Control and Licensing) Act 1966 (Act 118), sections 3, 7A, 8A, 11, 16M, 16N, 16Y, 18A and 22, text as amended, checked November 2026; Housing Development (Control and Licensing) Regulations 1989, Schedule G, clause 23, published by the National House Buyers Association, checked November 2026; Housing Development (Control and Licensing) Regulations 1989, Schedule H, clauses 4 and 26, published by the National House Buyers Association, checked November 2026; KPKT / Jabatan Perumahan Negara, TEDUH portal, checked November 2026; Bank Negara Malaysia, “Agensi Kaunseling dan Pengurusan Kredit commences operations”, 17 April 2006; New Straits Times, “Foreigners hit Johor property resale wall”, 20 April 2026

Jason Lim, REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6. General information checked on 9 November 2026, not legal or financial advice. Project status, figures and rules change; confirm with KPKT, your bank, your insurer and your lawyer before you act.