FACULTY OF BUILT ENVIRONMENT

Course Code & Title: ATGB2242 Principles of Malaysian Land Law

Exercise 7

Q1. In the event of delay, the house buyers are entitled to claim for Liquidated
Damages/Liquidated Ascertained Damages (LAD) from developer. Based on your
understanding, explain the term of “Liquidated Damages/Liquidated Ascertained
Damages (LAD)”.

 It is a statutory remedy to compensate the house buyer for the failure of the developer to
fulfil his obligation under the agreement to hand over vacant possession on a specific
date
 For late delivery of vacant possession, the Developer is liable to pay to house buyer
liquidated damages/liquidated ascertained damages (LAD) calculated from day to day at
the rate of 10% per annum of the purchase price from the expiry of the time, until the
date the house buyer takes vacant possession of the said Property
 Being a statutory remedy, liquidated damages/LAD is mandatory in nature and its
calculation is fixed

Q2. Calculate the Liquidated Damages/Liquidated Ascertained Damages (LAD) for a

property completed later than 24 months as per standard agreement.

The property price : RM 500,000

Sale & purchase agreement date : 1/8/2010
Schedule date of handover of vacant possession : 31/7/2012
Delivered vacant possession to purchaser : 16/12/2012

Liquidated Damages/Liquidated Ascertained Damages (LAD) start from: 01/08/2012 until

16/12/2012

01/08/2012 – 31/08/2012 : 31 days

01/09/2012– 30/09/2012
01/10/2012 – 31/10/2012
01/11/2012– 30/11/2012
01/12/2012– 16/12/2012
Total
: 30 days
: 31 days
: 30 days
: 16 days
: 138 days

Property Price : RM 500,000

10% : RM 50,000
Per Day : RM 136.61 (RM50,000/366-leap year)
Liquidated Damages/Liquidated : RM18,852.18
Ascertained Damages (LAD) (RM 136.61 x 138 days)
FACULTY OF BUILT ENVIRONMENT
Course Code & Title: ATGB2242 Principles of Malaysian Land Law

Q3. Diana has received a notice to take vacant possession of the property from the
developer. Advice Diana the term “Vacant Possession” and the manner of delivery of
vacant possession required under the law before her take vacant possession from the
developer.

Vacant Possession
 Cl. 24 – Time for delivery of vacant possession
 Vacant Possession – unit completed with water and electricity supply ready for
connection
 Schedule G - 24 months from date of agreement
 Schedule H – 36 months from date of agreement

Cl. 26 - Manner of delivery of vacant possession

 CCC is issued
 Water and electricity supply are ready for connection to the building
 Purchaser paid all the purchase price
 Completion of any alteration or additional work
 Includes handing over the building keys

Q4. Your client does not understand the term of “Materials and workmanship to conform
to description” in relation to the Housing Development (Control and Licensing)
Regulations 1989. As a consultant, elaborate the term “Materials and workmanship to
conform to description” to your client.

Clause 15 - Materials and Workmanship to Conform to Description

 The Building in a good and workmanlike manner in accordance with the description set
out in the Fourth Schedule.
 No changes or deviations can be made without Purchaser’s written consent, except
required by the Appropriate Authority
 The Purchaser is not liable for the cost of such changes or deviations
 If the changes or deviations involve the substitution or use of cheaper materials or the
omission of works originally agreed to be carried out by the Developer, the Purchaser is
entitled to a reduction in the purchase price
 Difficult to ensure Developer will provide good workmanship as buyer only see the unit
when on collecting keys
FACULTY OF BUILT ENVIRONMENT
Course Code & Title: ATGB2242 Principles of Malaysian Land Law

Q5. Based on your understanding, interpret the term “Defects Liability Period” in relation
to the Housing Development (Control and Licensing) Regulations 1989.

Clause 27 - Defects Liability Period

 Any defect, shrinkage or other faults within a period of 24 months after the date the
purchaser takes vacant possession, which are due to defective workmanship or materials
or not having constructed according to plans and descriptions
 Shall be repaired and made good by the developer at its own cost and expenses within
thirty (30) days of its having received written notice
 If the defect, shrinkage or other faults have not been made good within 30 days,
purchaser may carry out repair works and recover from the developer such cost
 2.5% of payment of purchase price will be released at the expiry of 8 months after the
date the Purchaser takes vacant possession of the said Property
 Another 2.5% at the expiry of 24 months after the date the Purchaser takes vacant
possession

Q6. Discuss the Housing Development (Housing Development Account) Regulations 1991
pursuant to Housing Development (Control and Licensing) Regulations 1989.

 The Housing Development (Housing Development Account) Regulations 1991 (HDA)

was introduced by the Housing Ministry in 1991 to ensure that developers who borrow
using the purchaser’s property as security pay the loans, and the instalments of the
purchase price paid by the purchaser are paid into this account
 Exemption
 These Regulations shall not apply if at the time of execution of the contract of sale,
the certificate of compliance and completion for the property has been issued and a
certified true copy of which has been forwarded to the purchaser
 The developer is required to put into the account all progress payments received from
the sale of the housing accommodation in the project
 The developer is not allowed to withdraw from the account except as authorized by the
Housing Developers (Housing Development Account) Regulations 1991

Q7. Elaborate your understanding on Housing Development (Tribunal for Homebuyers

Claims) Regulations 2002 and discuss what if the developer fails to comply with the
award.

Housing Development (Tribunal for Homebuyers Claims) Regulations 2002

 provides an easier, cheaper and faster means of dispute resolution for homebuyers
claiming compensation/damages from housing developers which arising from S&P
FACULTY OF BUILT ENVIRONMENT
Course Code & Title: ATGB2242 Principles of Malaysian Land Law

 The Tribunal may hear claims from buyers on condition that a claim is filed no later than
12 months from the date of:
 issue of the Certificate of Completion and Compliance (CCC)
 the expiry date of the defect liability period
 date of termination of S & P by either party before the date of issuance of CCC,
whichever is later

 The S & P involves housing accommodation built in a residential area

 Each claim does not exceed RM50,000

 2 types of claims that can be filed:

 Technical Claims (claims due to defective workmanship or materials)

 Non-Technical Claims (claims for late delivery of vacant possession)

For developer fails to comply with the award:

 The homebuyer can notifies TTPR (Tribunal Tuntutan Pembeli Rumah) and TTPR
(Tribunal Tuntutan Pembeli Rumah) will register the Award at the Magistrate's Court or
Sessions Court

 TTPR will send a copy of the recorded Award to the homebuyer. The recorded Award is
deemed as an order of the court and the homebuyer can enforce it through civil
proceeding

End of Question Paper