Yew Huoi, How & Associates | Leading Malaysia Law Firm

PROPERTY LAW– DEVELOPERS – LATE DELIVERY OF HOUSES – HOUSE BUYERS – LIQUIDATED ASCERTAINED DAMAGES – LATE DELIVERY OF HOUSES

I went to a showroom and I’ve decided to purchase a house. They asked me to fill up a form and pay an amount of RM10,000. Is the collection legal?

No.

  • Regulation 11(2) Housing Development (Control & Licensing) Act 1989 (‘HDA 1989’): “Everyone, not just developers, is prohibited from collecting booking fees”.
  • The scope of prohibition is wide enough to include lawyers, estate agents and any third parties purportedly acting as stakeholders for the housing developer in respect of collection of the booking fees.
  • The first 10% of the purchase price is only payable immediately upon signing of sale and purchase agreement (‘SPA’).
  • When it comes to interpreting social legislation, the courts must give effect to the intention of Parliament and not the intention of parties.

What to do when a developer fails to deliver the property in accordance with the timeline provided in the SPA?

  • The vacant possession of the house must be delivered to the house buyer in accordance with the timeline provided in the SPA.
  • Developers are required to deliver the vacant possession of a landed home with an individual title within 24 months from the SPA date whereas for strata-titled properties such as condominiums, serviced apartments has to be delivered within 36 months.
  • Pursuant to Clause 24(1) of Schedule G of the Housing Development (Control and Licensing) Act 1966 (‘HDA 1966’), developer ought to pay liquidated ascertained damages (‘LAD’), which is late delivery payment to the house buyer for the period of delay.

How is LAD calculated?

  • Many people might think that the calculation for LAD to house buyers begins when the SPA is signed.
  • In recent case of Tribunal PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah @ Ng Chee Kuan, the Federal Court has decided that the LAD should be calculated from the date the booking fee is collected, not the date the SPA is signed.

Whether house developers can be exempted from paying LAD during MCO?

  • Section 35 of the Covid-19 Act 2020 provides that house buyers cannot claim from developers the LAD incurred during the period of 18.3.2020 – 31.8.2020.
  • Under section 35(2), the developer is allowed to seek for an extension up to 31.12.2020.

late delivery

Recent Post

NEGLIGENCE – HOTEL LIABILITY: UNVEILING THE LEGAL RISKS IN NEGLIGENCE AND VICARIOUS LIABILITY CASES

In the hospitality industry, the duty of care owed by hotels to their guests is paramount. This legal update explores a scenario where a hotel’s failure to safeguard access to guest rooms leads to tragic consequences. It examines the potential negligence claim against a hotel employee and the broader implications of vicarious liability for the hotel and its owners. Drawing on relevant case law, we delve into the essential elements of negligence and the circumstances under which a hotel can be held responsible for the actions of its staff.

Read More »

FAMILY LAW – DIVISION OF MATRIMONIAL ASSETS

Many people have this false conception that all assets of the husband including EPF, shares and monies will be divided equally when there is a divorce.
What is the law that governs division of matrimonial assets in Malaysia?

Read More »

PROPERTY LAW – LEGAL IMPLICATIONS OF SALE AND PURCHASE AGREEMENT BREACHES AND THE RIGHT TO OFFSET IN MALAYSIAN PROPERTY TRANSACTIONS

In the realm of Malaysian property transactions, the intricacies of Sale and Purchase Agreements (SPAs) and the enforcement of Liquidated Ascertained Damages (LAD) play pivotal roles in safeguarding the interests of both developers and purchasers. This article delves into the legal framework governing the rights and obligations of parties involved in property transactions, particularly focusing on the consequences of contractual breaches and the conditions under which a purchaser can exercise the right to offset against LAD. Through the examination of relevant case law and statutory provisions, we illuminate the legal pathways available for resolving disputes arising from the failure to adhere to the terms of SPAs, thereby offering insights into the equitable administration of justice in the context of Malaysian property law.

Read More »

WINDING-UP – OFFICIAL RECEIVER AND LIQUIDATOR (“ORL”)

In cases of compulsory winding up, the court would appoint a liquidator under s.478 of the Companies Act 2016 (“CA 2016”) to expeditiously recover and realise the assets of the wound-up company for the distribution of dividends to creditors and administer any outstanding matters involving………..

Read More »

CONSTITUTIONAL LAW – ANTI-TRAFFICKING IN PERSONS AND ANTI-SMUGGLING OF IMMIGRANTS – CONSTITUTIONAL CLASH: EXAMINING LEGISLATIVE OVERREACH IN EVIDENCE LAW – PRIMA FACIE EVIDENCE

This update scrutinizes the constitutionality of Section 61A of the Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007, focusing on whether Parliament violated the separation of powers by defining prima facie evidence, and the judiciary’s role in upholding constitutional integrity.

Read More »
en_USEN
× Contact Us