Beyond Act 118: What We Know About the Proposed Real Property Development Act (RPDA)
ListingMine Academy | Legal Policy & Future Trends
For 60 years, the Malaysian property industry has operated under one "Bible": Act 118 (The Housing Development (Control and Licensing) Act 118).
It is the law that gives us Schedule H, the Defect Liability Period (DLP), and the Housing Tribunal. But Act 118 was designed for a different era. Its jurisdiction is strictly limited to "Housing Accommodation."
As the market evolves into complex mixed-use developments, Act 118 is showing its age.
Enter the proposed Real Property Development Bill (RPDA). Currently being drafted by the Ministry of Housing and Local Government (KPKT), this new legislation aims to modernize the entire landscape. While the final text is not yet gazetted, the policy direction suggests a massive shift from "Housing Licensing" to "Total Industry Regulation."
Here is the strategic breakdown of what is being proposed and why it matters.
1. Closing the "Commercial Gap"
The most significant limitation of the current Act 118 is its scope. It protects buyers of "Housing Accommodation" (Residential titles and, often, SoHos).
However, it generally excludes pure commercial properties like:
- Shop lots
- Office suites
- Industrial units
- Certain hybrid titles (SoVo, SoFo) that do not fit the "housing" definition.
The Current Reality (Non-HDA): Buyers of these units currently do not have access to the Homebuyer Tribunal. If a project is delayed or abandoned, they cannot claim statutory Liquidated Ascertained Damages (LAD) under standard HDA schedules. They are bound by the contract (SPA) written by the developer, and disputes must be settled in civil court, which is costly.
The RPDA Proposal: The Ministry has signaled that the RPDA aims to expand the scope of regulation beyond just housing. The goal is to provide a regulatory framework for all property development. If passed as intended, this would mean commercial buyers could finally enjoy statutory protections similar to residential buyers, ending the "two-tier" safety system.
2. From "Licensing" to "Holistic Management"
Act 118 is fundamentally a Control and Licensing Act. Its primary lever is issuing licenses (APDL) to developers.
The RPDA is envisioned as a holistic management framework. Based on ministry discussions, the new Act aims to introduce stricter governance on:
- Developer Resilience: imposing tighter financial health checks before a developer is allowed to launch, reducing the risk of abandonment.
- Data Integration: mandating better data transparency to prevent market overhang (oversupply).
- Technology Adoption: modernizing the legal recognition of digital SPAs and PropTech integration.
3. The "Urban Renewal" Context (The Redevelopment Question)
There is significant industry buzz regarding "En Bloc" sales and redevelopment, specifically lowering the consent threshold from 100% to a lower majority (e.g., 75% or 80%).
Important Distinction: While often discussed alongside the RPDA, these reforms are largely being driven under the separate Urban Renewal Bill (also in drafting).
However, the RPDA is expected to lay the operational groundwork for how these redevelopments are managed. The industry is watching closely to see if the RPDA will include specific clauses regarding the termination of strata schemes—a necessary legal step to allow old, decaying buildings to be redeveloped without requiring unanimous consent from every single owner.
4. What This Means for Agents (Future-Proofing)
If the RPDA is passed with its intended scope, the sales narrative will shift.
- A Safer Commercial Market: Currently, agents must be very careful when selling non-HDA commercial units, advising clients on the risks of the SPA. If RPDA standardizes commercial protection, agents can market commercial real estate to a wider pool of risk-averse investors who previously stuck to residential only.
- Higher Barrier to Entry for Developers: With stricter financial and data compliance, we may see a consolidation of developers. "Cowboy" developers may disappear, leaving agents with fewer, but more reliable, project launches.
- Professional Mastery: The transition period will be confusing. Agents who study the new Act early will become the "Experts" who can explain to investors why New Law commercial units are safer than Old Law ones.
Summary: The Modernization of Malaysian Property
Act 118 has done its job for decades. But as Malaysia builds more complex, integrated, and commercial-heavy townships, we need a law that covers the whole picture, not just the "housing" slice.
The RPDA represents the ambition to fix this. While we await the final parliamentary bill to confirm the specific mechanisms, the direction is clear: More regulation, wider coverage, and better protection for all property buyers, not just homeowners.
