Rehda backs Option to Purchase clause under proposed new housing law

PETALING JAYA (May 13): The Real Estate and Housing Developers' Association (Rehda) Malaysia has expressed support for the proposed introduction of an “Option to Purchase” (OTP) clause under the new Real Property Development Act, which is expected to replace the current Housing Development (Control and Licensing) Act 1966 (Act 118).

The new Act proposal was announced in November last year by the Housing and Local Government (KPKT) Minister Nga Kor Ming as part of the broader legislative overhaul.

Under the proposed OTP mechanism, both buyers and developers would be permitted to withdraw from a transaction before the sale and purchase agreement (SPA) is signed — giving purchasers a window to reconsider their decision, while allowing developers to exit projects that are no longer commercially or financially viable.

Rehda president Datuk Ho Hon Sang (pictured) said in a press statement today, the association welcomes the proposal in principle, noting that the mechanism offers meaningful protection for prospective homebuyers at the pre-commitment stage.

"While the mechanism has yet to be finalised and there are still many uncertainties about the clause, in principle, the OTP mechanism is beneficial in protecting prospective homebuyers who intend to purchase a specific residential unit.

“At the same time, it provides them with an opportunity to reconsider their purchase decision should their circumstances change," he added.

Ho said that developers could also use the OTP mechanism to better gauge genuine market interest before entering into binding commitments or commencing construction.

Rehda called on the government — specifically KPKT — to continue engaging industry stakeholders in finalising the framework, stressing that the clause must be clear, practical, and equitable to both parties.

Ho also noted that the OTP mechanism could serve as a practical solution to longstanding industry challenges, including the issue of abandoned housing projects.

"The OTP introduction could also potentially provide a practical solution to the various issues both parties faced, including concerns relating to abandoned housing projects, as mentioned by the Minister during his announcement," he said.

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