DBKK’s Authority to Auction Unclaimed Vehicles Questioned

By the Editorial Team · Thursday, October 1, 2026

Kota Kinabalu City Hall’s policy to forfeit and auction unclaimed vehicles after 30 days is being challenged over potential conflicts with hire-purchase laws that protect financial institutions’ ownership rights. The dispute raises questions about the legality of city bylaws overriding lender protections, with critics urging a review to prevent premature loss of financed vehicles.

Kota Kinabalu City Hall’s (DBKK) authority to auction unclaimed vehicles has come under legal scrutiny amid concerns about the rights of financial institutions. The controversy centers on DBKK’s policy to forfeit and auction vehicles that remain unclaimed for 30 days following towing.

The issue was raised by the non-governmental organisation Gerakan Kuasa Rakyat Malaysia (G57), whose chairman, Datuk Zulkarnain Mahdar, questioned whether DBKK’s actions could override hire-purchase laws protecting banks’ legal interests in financed vehicles. Many of the towed vehicles are believed to be still under bank financing agreements, where ownership remains with the lender until full payment is made.

“Under which ordinance or by-law is DBKK empowered to set aside the rights of banking institutions and proceed with forfeiture within only 30 days?” Datuk Zulkarnain asked in a statement released recently. He expressed concern that city by-laws might conflict with the legal protections afforded to financial institutions in hire-purchase contracts, potentially leading to premature termination and transfer of ownership through public auction.

DBKK Mayor Datuk Seri Dr Sabin Samitah explained that the forfeiture and auction procedures are part of the city’s efforts to manage unclaimed vehicles impounded due to parking offences and outstanding debts. He noted that since DBKK started towing operations in April, a total of 1,385 vehicles have been towed, with 52 vehicles having undergone the forfeiture and auction process after their owners failed to settle relevant charges, including any unpaid parking fines.

The mayor stressed that the policy aims to encourage timely settlement of dues and the retrieval of vehicles by owners. According to his statement, failure to claim a vehicle and clear all related payments within 30 days would result in forfeiture and eventual auction.

The differing views highlight a legal grey area regarding the extent of municipal authority over vehicles still encumbered by hire-purchase agreements. While DBKK maintains that its procedures are necessary to enforce city regulations and recover costs, G57 and other critics argue that such measures may infringe upon the rights of financial institutions and vehicle owners protected under national hire-purchase laws.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.