“KPKT to establish escrow accounts for housing projects, ensuring funds are used solely for intended projects. RM30,000 deposit aid proposed for first-time homebuyers.”
Kuala Lumpur, 21th Aug 2024, 11.48pm – The Housing and Local Government Ministry (KPKT) announced plans to establish escrow accounts for housing projects to ensure that payments made by homebuyers are exclusively used for the specific projects they have purchased.
An escrow account is managed by a third party or held in trust while a transaction between two or more parties is completed.
“This ensures that all funds paid by homebuyers will be dedicated solely to the intended project,” said Minister Nga Kor Ming in a statement addressing ministry initiatives and issues related to abandoned housing projects.
“Currently, without escrow accounts, developers can divert funds from Project A to Project B, which can result in Project A being abandoned.
“With this amendment, such practices will no longer be allowed,” Minister Nga Kor Ming stated on Wednesday.
In the same statement, Nga mentioned that KPKT has proposed to the Ministry of Finance a plan to provide up to RM30,000 in deposit assistance for first-time homebuyers.
The proposed initiative, named the Madani Deposit, aims to ease the monthly payment burden for first-time buyers, particularly young purchasers in the B40 (Bottom 40%) and M40 (Middle 40%) income groups, he added.
“This initiative aims to reduce the monthly financial burden for first-time homebuyers, particularly young people in the B40 and M40 income groups, and supports the ministry’s ‘Shelter for All’ goal of ensuring every citizen has a home,” Nga stated.
The Madani Deposit is part of 33 proposals submitted by KPKT to the Finance Ministry for Budget 2025. Other proposals include creating 100 Madani recreational parks, transforming retention ponds, and introducing electronic property sale agreements with e-stamping.
On the issue of abandoned projects, Nga mentioned that since January 2023, the ministry has successfully revived 704 sick or abandoned projects with a total gross development value of RM58.94 billion, benefiting over 65,000 homebuyers.
“Our goal is to eliminate abandoned housing projects by 2030. KPKT will amend the law to prevent developers found guilty of fraud from leaving the country,” he added.
