Payment for late delivery of houses must be calculated from date booking fee is paid

On 19.01.2021 the Federal Court decided in the case of PJD REGENCY SDN BHD v. TRIBUNAL TUNTUTAN PEMBELI RUMAH [2021] 2 CLJ 441 that the payment due from Housing Developers to Purchasers for late delivery of houses should be calculated from the date the booking fee is paid, and not the date the sales and purchase agreement (SPA) is signed.

Chief Justice Tengku Maimun Tuan Mat said: “Where a developer fails to deliver vacant possession according to the time stipulated in the statutory SPA, the calculation of the Liquidated Ascertained Damages (LAD) begins from the date of payment of the booking fee and not from the date of that statutory agreement.”

The Court further states that the legislative intent was that the initial payment of monies, in the form of a deposit, is sufficient to constitute an intention to enter into a contract given that the agreement would have to be signed at the same time. Where there is a delay in the delivery of vacant possession by a developer to the purchaser in respect of scheduled contracts under reg. 11(1) of the HDR enacted  pursuant to s. 24 of the HDA, the date for calculation of LAD begins from the date of payment of deposit/booking fee/initial fee/expression by the purchaser.

Conclusion:-

The date the Developer must deliver vacant possession of the Property to the Purchaser start from the date the Purchaser pays the deposit/booking fee/initial fee to the Developer.

If the Developer fails to Deliver the Property within the agreed time as per the SPA, calculation of Liquidated Ascertained Damages begins from the date of payment of deposit/booking fee/initial fee by the Purchaser.