Ting Fui Boon
Legal Associate
When a developer delivers your home late, the law gives you a remedy. Here is how liquidated damages work under Malaysia's housing development regime.
Buying a property off-plan carries one persistent risk: late delivery. Fortunately, the statutory sale and purchase agreement under the Housing Development (Control and Licensing) regulations builds in a remedy — liquidated damages (LAD) — so that purchasers are compensated when developers run late.
How LAD is calculated
The statutory SPA fixes the delivery period for vacant possession and provides a formula for LAD based on a percentage of the purchase price per day of delay. Because the figure is pre-agreed, a purchaser generally does not need to prove the actual loss suffered.
When does time start running?
A recurring battleground is the date from which the delivery period — and therefore the delay — is measured. Case law has refined whether time runs from the date of the SPA or from payment of the booking fee, and purchasers should check which applies to their agreement.
- Confirm the contractual delivery period in your SPA.
- Keep records of payment dates and key milestones.
- Note the completion of common facilities, which carries its own delivery period.
Liquidated damages are a right written into the statutory contract — not a favour the developer chooses to grant.
Developers sometimes resist or under-pay LAD claims. We advise purchasers on quantifying and recovering their entitlement, through negotiation or the appropriate tribunal or court.
This article is general information, not legal advice. For guidance on your specific situation, please speak to our team.
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