HDA 1966 Episode 3: Calculating Liquidated Ascertained Damages (LAD) for Late Delivery of Vacant Possession (VP)

Home / Conveyancing and Property / HDA 1966 Episode 3: Calculating Liquidated Ascertained Damages (LAD) for Late Delivery of Vacant Possession (VP)

When it comes to housing development projects, the time of delivery of vacant possession (VP) is crucial as the purchasers anticipate to obtain their house keys in time. It is the developer’s duty to complete the housing development project within the stipulated timeframe. As stated previously, the period of delivery of VP for HDA property is fix in the statutory Sale and Purchase Agreement (SPA).

However, delays can occur due to various reasons and more often than not, it leads to dissatisfaction on the purchasers’ part. As a homebuyer or even a potential homebuyer, we believe that it is important for you to know that it is your right to claim Liquidated Ascertained Damages (LAD) from the developer in the event of late delivery of VP. In this article, we will briefly explain what is LAD and its current legal position.

What is LAD?

LAD for HDA property is a pre-determined damages agreed by the parties in the event of late delivery of VP upon signing the SPA. The LAD for HDA property is fix in the SPA as stated previously. This article will briefly explain on the current legal position of claiming LAD for late delivery of VP.

The question that always arise in related to LAD is; when does LAD should be calculated? The legal issue is on whether the date for calculation of LAD should begin from the date stated in the SPA or from the date the purchasers paid booking fee/deposit/initial fee to the developer?

The Current Legal Position on LAD

The current position of this issue is as decided in the Federal Court case of PJD Regency Sdn Bhd v Tribunal Pembeli Rumah Anor and other Appeals [2021] 2 MLJ 60. In this case, the purchaser had entered into a Pro Forma Sale with the developer, PJD Regency and paid the booking fee on 16/01/2013. Only on 21/03/2013, the SPA was formally executed. The SPA stated that ‘the delivery of VP must be made within 42 months from the date of this agreement’. On 23/01/2017, notice of delivery of VP was sent to the purchaser. Due to delay of delivering of VP, the purchaser claimed for LAD from the developer.

In this case, the purchaser and the developer interpreted the phrase ‘from the date of this agreement’ differently. The purchaser argued that it began from the date of booking fee payment and the developer argued that it began from the date of the SPA. The Federal Court judges having referred to several legal precedents decided that where a developer fails to deliver vacant possession according to the time stipulated in the statutory SPA, the calculation of the LAD begins from the date of payment of the booking fee and not from the date of the SPA.

Decision / Conclusion

Hence, in this case, the calculation of LAD for late delivery of VP started when the purchaser entered into the Pro Forma Sale and paid the booking fee i.e., on 16/01/2013. This most recent decision shall serve as the current legal position in calculating LAD. On the other hand, we have shared the formula on how to calculate the LAD rate in our previous article.

We hope that this brief sharing will help you in better understanding the LAD issue. Feel free to contact us if you are interested to know more on your right in claiming the LAD.

Article Disclaimer: The contents written above and/or in this website do not constitute a legal advice and should not be relied upon by any parties as such. Please reach out to us for further enquiries.

Interested to know more on how to claim for LAD? Feel free to connect with our team directly at admin@nhcolaw.com

Leave a Reply

Your email address will not be published. Required fields are marked *

HAJAR AFIFAH ZAINAL

SYARIAH LAWYER

Hajar Afifah Zainal is a Syariah lawyer with a strong academic and professional background in Islamic law. She holds a Bachelor of Islamic Sciences & Arabic (Syariah) from Al-Azhar University, a Diploma in Law and Administration of Islamic Judiciary (IIUM), and a Master of Laws (LL.M.) from Universiti Kebangsaan Malaysia. She began her career as a Syariah paralegal at Tarmizi Marzuki & Sulaiman, where she gained hands-on experience in a wide range of Syariah matters, including divorce, matrimonial property, maintenance, custody, inheritance, and related applications. She is admitted as a Syariah lawyer in Terengganu, the Federal Territories, and Selangor, reflecting her capability to represent clients across multiple jurisdictions. Currently serving as Shariah Counsel at Nurainie Haziqah & Co., she advises on family and estate matters, combining technical expertise with a thoughtful and principled approach to legal practice.

NUR AMIRAH IBERAHIM

LEGAL ASSOCIATE

Nur Amirah Ibrahim is an Advocate and Solicitor of the High Court of Malaya, admitted in December 2023. She graduated with First Class Honours in LL.B (Hons.) from Universiti Utara Malaysia in 2022. She began her legal career at Sabarudin Othman & Ho, where she completed her pupillage with a focus on civil litigation. Her experience includes handling motor vehicle accident claims, including third-party bodily injury and property damage matters, as well as advising insurance companies and managing related proceedings. She has also been involved in general litigation matters such as defamation and breach of contract, assisting in hearings and trials. In 2024, she joined Nurainie Haziqah & Co., where she continues to develop her practice in litigation. Known for her diligence and strong work ethic, she is committed to delivering reliable and effective legal support while upholding professional standards.

NUR SYAZWANI AZLAN

PARTNER & HEAD OF CORPORATE & COMMERCIAL

Nur Syazwani Azlan is an Advocate and Solicitor of the High Court of Malaya, admitted in 2014, with extensive experience in conveyancing, litigation, and corporate practice. She holds a Bachelor in Legal Studies (BLS) and LL.B (Hons.) from Universiti Teknologi MARA. She began her career at B.C. Tan & Co, gaining hands-on experience in civil litigation and conveyancing, including property transactions, loan documentation, and court proceedings. She later transitioned into a corporate role as Legal and Human Resources Manager in a media company, where she handled employment law matters, corporate agreements, and media contracts with major broadcasters. Resuming legal practice in 2021 at Khong & Son, she focused on conveyancing, particularly post-auction cases, high-value transactions, and complex property issues. She has successfully managed intricate matters involving transfers, auctions, and estate-related complications. Currently a Partner at Nurainie Haziqah & Co., she leads the Conveyancing Department, specialising in financing, subsale transactions, and developer projects.

NURAINIE HAZIQAH

MANAGING PARTNER

Ainie Haziqah brings over 10 years of legal experience across civil, general, and Syariah-related litigation. Her practice includes representing Joint Management Bodies and companies in debt recovery matters, as well as handling a wide range of family and matrimonial cases such as divorce, child custody, and maintenance. In addition to her litigation work, Ainie serves as a Syariah Consultant, providing tailored legal guidance to individuals and families. She is deeply committed to social impact, with a strong focus on advocating for women’s rights and addressing domestic abuse through both legal practice and community engagement. Ainie is actively involved in pro bono work, particularly with DHRRA Malaysia, where she supports undocumented and stateless individuals in securing their rights and citizenship. She has also co-founded several NGOs dedicated to assisting underprivileged communities, including refugees, single mothers, and the underserved communities. Beyond her legal practice, Ainie contributes to education and thought leadership. She has been invited to speak at universities and public platforms on topics such as family law, statelessness, and social justice. She has also played a role in academic development, including reviewing curriculum for law and politics programmes, and serves as a mentor on international platforms supporting women’s advancement.

SITI HAWA KHAIRUNNISA

PARTNER & HEAD OF CORPORATE & COMMERCIAL

Hawanisa is a corporate and commercial lawyer with over 10 years of experience advising businesses across various industries. Her practice spans corporate advisory, commercial transactions, and regulatory compliance. She has extensive experience in drafting, reviewing, and negotiating commercial agreements, as well as advising on corporate structuring, mergers and acquisitions, and shareholder matters. Hawanisa has also supported cross-border transactions and market entry strategies. Her combined legal and business background enables her to deliver commercially grounded advice aligned with clients’ strategic objectives. She currently heads the Corporate and Commercial department, where she leads matters with a focus on providing practical, strategic, and business-oriented legal solutions.