In this update
Vacant Possession Delivery Standards in Malaysia
According to the Housing Development (Control and Licensing) Regulations 1989 (HDR 1989), under Section 24 of the Housing Development (Control and Licensing) Act 1966 (HDA 1966), the sale contract is outlined in Schedules G or H of HDR 1989. If a developer does not deliver vacant possession within the agreed timeframe specified in the Sale and Purchase Agreement (SPA), the purchaser can claim liquidated ascertained damages (LAD). A developer must compensate the purchaser even if vacant possession is delivered on time but not in the agreed manner.
Essential Utilities for Vacant Possession
Clause 27(1)(c) of the SPA specifies that ‘ready for connecting’ means the property should have operational electricity points and an accessible water supply. This ensures the purchaser can use and enjoy the property.
The deadline for delivering vacant possession is separate from the standards of delivery. A purchaser can seek compensatory damages for a breach of Clause 27 in addition to any LAD claims for delayed delivery.
Case Study: Incomplete Utilities in Delivered Property
In the case of ‘X’, who bought a property that was handed over on time but lacked electricity and water connections, the developer’s claim that ‘X’ suffered no loss due to timely delivery is not valid. Therefore, ‘X’ is entitled to claim compensatory damages from the developer for breaching Clause 27.
Case Reference: Remeggious Krishnan v SKS Southern Sdn Bhd [2023] 3 MLJ 1 – Federal Court (Putrajaya)