KUALA LUMPUR, Aug 1 — The dream was sold before the keys were handed over — a home “walking distance and just five minutes from the city” and “an exclusive low-density living environment”. But for some homeowners, the truth only emerged after they moved in.

What looked like convenience on paper felt different in reality. The short walk became a longer journey through crowded roads, the promised exclusivity gave way to congestion, and the lifestyle buyers imagined was replaced by daily struggles with traffic, long waits for lifts and overcrowded facilities.

National House Buyers Association of Malaysia (HBA) honorary secretary-general Datuk Chang Kim Loong said, in line with Regulation 8(1A) of the Housing Development (Control and Licensing) (Amendment) Regulations 2015, any advertisement by a licensed housing developer shall not contain claims, including panoramic views, travelling time from housing projects to popular destinations, or any other particulars that the developer cannot genuinely substantiate.

Chang said developers found guilty of breaching the regulations may face a fine of up to RM50,000, imprisonment for up to five years, or both.

“Meanwhile, the Housing Development (Control and Licensing) Regulations 1989 clearly stipulate the types of information that developers can and cannot include in property advertisements. 

To prevent such misrepresentations, developers are required to submit their brochures and promotional materials to the National Housing Department for approval before distributing them to potential buyers.

“However, despite known violations, there have been no prosecutions to date. Without legal action, there will be no strong deterrent effect, and irresponsible parties may continue repeating such practices,” he said.

“In my view, the authorities should conduct unannounced inspections and surprise visits to developers’ offices to verify compliance. This would help identify misleading or unauthorised promotional materials before more buyers are affected.

“Developers found to have deliberately misled buyers should not only be blacklisted but also face prosecution. Without prosecution, there will be no strong deterrent effect, and irresponsible parties may continue repeating such practices,” he said, while questioning how many developers had been prosecuted over the past decade.

Meanwhile, National House Rental Association (NHRA) chairman Prakash Kalivanan said misleading advertisements can affect buyers for decades as many remain tied to long-term housing commitments.

“Phrases commonly used in property advertisements can create expectations that may not reflect the reality after a development is completed and fully occupied. For example, a project may be advertised as being ‘walking distance or just five minutes from the city”.

“While the physical distance remains unchanged, the actual experience can be completely different once thousands more residents move into the area. A development marketed as ‘exclusive’ or ‘low-density’ may eventually become highly congested, with longer waiting times for lifts, traffic bottlenecks, overcrowded facilities and greater pressure on surrounding roads.

“A five-minute journey can become 15 or even 30 minutes during peak hours. These are not minor inconveniences...they affect residents’ daily routines, family time, travel costs and overall quality of life,” he said.

Prakash also urged buyers and tenants to look beyond attractive advertisements by visiting project sites at different times of the day, checking approved development plans and verifying claims before committing to one of the biggest financial decisions of their lives.

The concerns raised by consumer groups are not merely theoretical. In the case of Toh Shu Hua & Ors v Wawasan Rajawali Sdn Bhd (2023) 2 CLJ 310, 122 apartment buyers successfully sued the developer for misrepresentation. 

The Kuala Lumpur High Court held that the brochure was not mere marketing hype and awarded RM50,000 in damages to each buyer, as well as RM2 million in aggravated damages to be shared among them.

Meanwhile, Datuk J Shamesh, managing partner of Jeeva Partnership, said Regulation 8(1A) of the Housing Development (Control and Licensing) Regulations 1989 specifically prohibits developers from making misleading claims, including descriptions such as a property being “walking distance” from certains location if such statements could create a false impression among buyers.

 According to the lawyer, generally, most developers comply with these requirements. However, where representations made in advertisements or promotional materials are inaccurate or misleading, buyers may have legal recourse against developers.

Shamesh said buyers who believe they were misled may pursue civil action against developers and seek remedies, including damages or, in certain circumstances, the invalidation of the sale and purchase agreement (SPA).

He cited the case of Sri Damansara Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor, where the court recognised that promotional materials could form part of the representations made by developers to buyers.

He said possible examples of misrepresentation could include facilities or features heavily promoted during the sales process but not delivered after completion, such as a gymnasium, water fountain, Japanese landscape garden or rooftop garden.

Shamesh, who is also the president of the Home Buyers Tribunal, added that buyers generally have six years from the signing of the sale and purchase agreement to take legal action if they wish to challenge alleged misrepresentations.

“Buyers who want to take action over misrepresentations made in brochures must preserve crucial evidence, including the original brochure and photographs. Buyers must understand that legal action depends heavily on evidence.  

“In my opinion, in this fast-paced and competitive world we cannot curtail developers, just like any commercial entities, from employing the latest advertising and promotional approach to sell their properties as long as they do not misrepresent the buyers.

“Some advertisements are beyond the control of the developer, for example, free of traffic, hill view, when five years later, traffic increases and the hills are under development...the developer cannot be faulted as it is obviously beyond their control,” he said.

Meanwhile, the president of Real Estate and Housing Developers’ Association (Rehda) Malaysia Datuk Zaini Yusoff contended that the association strongly believes property developers must uphold the highest standards of transparency, accuracy and integrity in marketing their products.

According to Zaini, home buyers deserve to have the full and accurate details about the home they are considering to purchase to enable them to make informed purchasing decisions. 

“Descriptions relating to matters such as proximity to amenities, transportation hubs or landmarks should be fair, reasonable and not misleading, while all advertisements must comply with the requirements of the Housing Development (Control and Licensing) Act 1966 (Act 118) and its subsidiary regulations.

“We (Redha) are aware that there may be isolated instances where marketing materials prepared or disseminated by appointed sales agents or third parties do not accurately reflect the developer’s approved content, but these are not representative of the industry,” he said.

He further said that developers remain responsible for ensuring all parties acting on their behalf market their projects accurately and in compliance with the applicable legal and regulatory requirements. 

“At the same time, we call upon prospective purchasers to exercise due diligence by reviewing the S&P agreement, approved plans and specifications, visiting the project site where possible, and seeking clarification on any representations made before making a purchasing decision.

“If there have been genuine misrepresentations or noncompliance with contractual obligations, there are established legal avenues available to seek appropriate redress. Redha will continue to encourage our members to uphold our nation-building role of providing quality, affordable homes for the rakyat in a timely and sustainable manner,” he said. — Bernama