Delivery of Vacant Possession (“VP”) refers to the process by which a developer hands over a property, together with all fixtures and fittings stipulated in the Sale and Purchase Agreement (“SPA”), to the purchaser upon completion of the conveyancing transaction.

When Must Vacant Possession be Delivered?

Pursuant to the Housing Development (Control and Licensing) Regulations 1989 (“HDR 1989”):

• Landed properties (Schedule G): VP must be delivered within 24 months from the date of the SPA.
• Stratified properties (Schedule H): VP must be delivered within 36 months from the date of the SPA.

That said, in a case the developer unable to deliver the vacant possession within the timeframe,  a developer may apply to the Minister for an extension of time (EOT), subject to specific conditions and approval.

What Compensation are Purchasers Entitled To for Late Delivery?

Where the developer fails to deliver VP within the stipulated timeframe, the purchaser is entitled to claim Liquidated Ascertained Damages (LAD). The clause on the LAD is stipulated in the Sale and Purchase Agreement whereby the Purchaser has right to involve this clause when the late delivery laste occur.

LAD represents a pre-agreed measure of damages for losses suffered due to delay. Typically:

• It is calculated based on a percentage of the purchase price as stated in the SPA.
• It accrues on a daily basis for each day of delay beyond the contractual completion date.

How Can Purchasers Claim LAD?

Purchasers have two options to claim LAD:

1. File a claim at the Tribunal for Homebuyer Claims

Purchasers may file a claim before the Tribunal for Homebuyer Claims, which provides a faster and cost-effective dispute resolution mechanism. The claim shall be less than RM50,000.00. Further information, you may refer to Ministry of Housing and Local Government

2. Civil Action in Court

Alternatively, purchasers may initiate a civil suit through a lawyer against the developer to recover by:

• Filing a Writ of Summons and Statement of Claim

This compels the developer to enter appearance and defend the claim in court.

Key Principles on LAD Calculation (Based on Recent Case Law) 

1. LAD Runs from Booking Fee Date

In PJD Regency Sdn Bhd v Tribunal Pembeli Rumah & Anor, the court held that:

• Even though booking fees are technically prohibited under Regulation 11(2) of the HDR 1989,
• LAD is calculated from the date the booking fee is paid, not from the SPA date.

This method is to protect the Purchaser while also give a strict warning for the Developer who still practising such method.

2. CCC vs CPC for Common Facilities

In Hoo See Sen & Anor v Public Bank Berhad [1988] 2 MLJ 170 and Faber Union Sdn Bhd v Chew Nyat Shong & Anor [1995] 2 MLJ 597, for delays involving common facilities, the court held that:

LAD is calculated from the date of issuance of the Certification of Completion and Compliance (CCC) not from the Certificate of Practical Completion (CPC)

3. Rebates Do Not Reduce LAD Base

The same courts have consistently held that LAD must be based on the full/ exact purchaser price, not the discounted price after rebates. 

Vacant possession is not just a ceremonial key handover; it is a legal milestone that triggers rights, obligations, and potential liabilities. When timelines slip, LAD acts as the purchaser’s financial shield, quietly ticking in the background like a legal metronome.