How Defects Affect the Value of Property in Malaysia: Legal Insight for Homebuyers

BY MESSRS LUI BHULLAR

How Defects Affect the Value of Property in Malaysia: Legal Insight for Homebuyers

When purchasing a new property in Malaysia, one of the most critical but often overlooked considerations is the impact of construction defects on property value. These defects can range from minor cosmetic issues to serious structural problems and may significantly diminish the marketability and investment potential of a home. Understanding your legal rights and recourse is essential for safeguarding your investment.

Types of Defects and Their Implications

Common property defects include:

• Structural cracks (walls, ceilings, foundation)

• Water seepage and plumbing issues

• Roof leaks and faulty drainage

• Improper workmanship

• Non-compliance with building plans or specifications

These defects not only result in repair costs but can also affect the property's resale value, delay rental income, and lead to buyer distrust.

Legal Protection Under the Housing Development Act (HDA)

The Housing Development Act 1966 (HDA) provides statutory protection for homebuyers, including a Defect Liability Period (DLP) of 24 months after vacant possession. During this time, developers are legally obligated to rectify any reported defects at no cost to the homeowner.

Hiring an experienced HDA lawyer Malaysia ensures that your defect claims are documented, submitted, and followed up properly within this window.

Filing a Defect Claim

If a developer refuses or delays repairs, homeowners can file a claim with the Housing Tribunal Malaysia. This quasi-judicial body offers a faster and more affordable alternative to traditional litigation. A skilled Housing Tribunal Malaysia lawyer can help present a strong case, especially for claims involving serious damages or repeated negligence.

How Defects Impact Valuation and Financing

Banks and valuers take property defects seriously:

• Loan approvals may be affected if the property is deemed unsafe or poorly maintained.

• Insurance premiums might increase for high-risk or non-compliant structures.

• Market value can drop drastically, particularly if the defects are visible or widely known in the neighbourhood.

Having a property lawyer Malaysia review your Sale and Purchase Agreement (SPA) can help identify hidden clauses or liabilities and protect you from unfair terms.

Importance of a Sound SPA: Legal Review and Advice

A well-drafted SPA is your first line of defense. A SPA lawyer Malaysia ensures that the developer is contractually bound to deliver a defect-free property. Clauses relating to defect liability, vacant possession, and LAD (Liquidated Ascertained Damages) must be clear and enforceable.

Delay in Delivery Due to Defects

Serious or widespread construction defects may delay the issuance of vacant possession, resulting in a breach of contract. A vacant possession lawyer Malaysia can help homebuyers claim compensation under LAD provisions and negotiate with developers or pursue legal action when needed.

Challenging Developer Negligence

If the defect is due to substandard construction or violation of building regulations, a property lawyer in Malaysia can assist in initiating a civil suit or pursuing arbitration. Legal action is often necessary for high-value claims or when developers deny responsibility.

Legal Advice for Homebuyers: Proactive Prevention

Prevention is better than cure. Homebuyer legal advice in Malaysia often involves getting a legal opinion before booking a unit, especially for under-construction properties. This reduces your risk of encountering defective workmanship and hidden costs.

Conclusion

Construction defects are more than just an inconvenience—they can significantly reduce a property's value and lead to long-term legal and financial issues. Consulting a knowledgeable property lawyer Malaysia or HDA lawyer in Malaysia ensures you know your rights and take the necessary steps to preserve the value of your investment.

Whether you’re reviewing your SPA, claiming LAD, or pursuing justice through the Housing Tribunal Malaysia, the right legal support can make all the difference. Don’t let hidden defects ruin your dream home—get professional legal guidance today.

👉 Get a free consultation with our experienced team and take legal action with confidence.

📞 Contact Messrs Lui & Bhullar today for a Free consultation.

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