Hundreds of Homeowners Face RM13 Million in Penalty Fees Due to Undisclosed Bumiputera Lots

rawang housing

In a surprising turn of events, 574 homeowners in Rawang are now grappling with unforeseen penalty fees amounting to RM13 million, stemming from the undisclosed allocation of Bumiputera lots in their property purchases. These homeowners have owned their properties for over a decade, unaware of the Bumiputera status attached to their units.

The issue came to light when the liquidators of the now insolvent developer sent notices earlier this year, demanding substantial penalty fees. These fees are a prerequisite for the Selangor Housing and Property Board (LPHS) to transfer the Bumiputera lots to non-Bumiputera owners.

What has left the affected homeowners baffled is that they had paid the full property price with no indication or discount mentioned in their sale and purchase agreements regarding Bumiputera quotas. Typically, Bumiputera units come with discounts ranging from 7% to 15%.


Susan Lawrence, one of the affected buyers, expressed frustration, stating, “The Selangor Land and Mines Office (PTGS) is refusing to release the titles unless we pay a 12% penalty.” Homeowners like Shawn Nair believe that such discrepancies should have been detected from the outset. Nair questioned, “When you look at a Bumiputera lot and see an Indian name attached to the title, wouldn’t this trigger alarm bells?”

According to documents reviewed by StarMetro, the Selangor State Executive Council (MMKN) approved a minimum of 40% Bumiputera quota with a 10% discount for the Rawang project on July 9, 2001. However, the now defunct developer breached the allocation quota for Bumiputera lots, selling approximately 90% of the units to non-Bumiputera buyers without applying for blanket consent, as later discovered by the liquidator.

The notice from the liquidator also mentioned that LPHS, the state housing board, sought penalties for breaching the Bumiputera quota but was open to offering discounts to the affected buyers.

In a related issue, about 200 homeowners in a Subang Jaya project by another developer are also facing a similar situation and are required to pay an additional 12% of the purchase price.

Selangor Housing and Culture Committee chairman Borhan Aman Shah stressed the importance of preventing companies from profiteering from such situations and the need to identify the developers involved. He warned that non-compliance with Bumiputera quota policies could affect these companies’ future projects in Selangor.

Lawmakers, including Selayang Member of Parliament William Leong and Subang Jaya assemblyman Michelle Ng, have called for accountability. Leong emphasized the need to hold company directors accountable, stating that it is unfair to punish innocent buyers who did not profit from the sale. Ng proposed an improved reporting system and mandatory bank guarantees by developers to prevent overselling of Bumiputera lots and suggested amending existing laws to make company decision-makers personally liable in such cases.

Selangor Housing, Urban Well-being, and Entrepreneur Development Committee chairman Rodziah Ismail indicated that the state government is evaluating mechanisms to prevent developers from breaching Bumiputera quotas. Stricter penalties, including blacklisting board members and limitations on future projects in Selangor, may be imposed on developers who fail to comply. Discussions are planned with relevant departments and organizations to initiate this process.

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