Q. HOW TO CALCULATE THE COMPENSATION ON DELAYED DELIVERY OF VACANT POSSESSION?
A.
The remedies which are provided for under the SPA come in the form of monetary value and remedial work. For the sake of this question, let us consider that the housing developer is only late in delivering the property on time but is not abandoning the project.
The time frame that is given for housing developers to deliver the vacant possession of a property differs from one type of property to another. For landed property the time frame is two years (24 months according to the agreement) and for subdivided building the time frame is three years (36 months). If the housing developer is late in delivering vacant possession to the purchaser, both SPAs have set the amount of liquidated damages that the housing developer has to pay the purchaser at a rate of 10 percent of the purchase price.
The calculation will start from the date of expiry of the 24 months (or 36 months, depending on the type of property) to the date of the actual delivery of vacant possession. This again is subjected to the interpretation of "Booking Fee Date" or "SPA Date" as various court cases have set the different treatment in West Malaysia or in Sarawak. Refer earlier postings for the related discussions.
- Booking date of SPA date - who is to benefit?
- LAD to be counted from Booking Date or SPA Date?
- Apex Court ruling against "booking fee"
An example of how this liquidated damages are calculated for a late delivery of 2 months of a RM400,000 property is as follows:
Let us take 2 months of equal 31 days (Jul & Aug)
which amount to 62 days
10% (rate) x 62/365 (days) x RM400,000* (purchase price) = RM6,794.52
You can claim this amount either through the Tribunal for Homebuyers Claim maintained by the Ministry of Housing and Local Government (KPKT) or in extreme case, you can claim it at the magistrates court. Of course, if you manage to get the payment of the liquidated damages which you are entitled to from the housing developer without having to go through the process of law, you are one of the lucky few.
*Instead of RM200,000 in the reference below.
Ref:
Khairul Anuar (2010) 40 Questions You should ask your lawyer before buying a residential property in Malaysia. Pg 76.