Claim For Liquidated Ascertained Damages And Late Delivery Of Vacant Possession

• Published date: 01 December 2022
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Construction & Planning, Real Estate
• Law Firm: Chooi & Company + Cheang & Ariff
• Author: Jin Yee Chang, Chong Mean Shan and Muhammad Hiqmar Danial Bin Hidzir

PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah and Ng Chee Kuan and other appeals [2021] 2 MLJ 60

PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah and Ng Chee Kuan and other appeals [2021] 2 MLJ 60 ("PJD Regency") is a Federal Court decision which largely discussed the calculation of liquidated ascertained damages ("LAD") where there is late delivery of vacant possession.

Briefly, from a homebuyer's perspective, a homebuyer is entitled to claim for LAD for late delivery of the property and also for late delivery of common facilities.

FEDERAL COURT DECISION

PJD Regency concerns 3 sets of cases, altogether 7 appeals being heard one after another.

The significance of the decision in PJD Regency is as such:

1. Where there is a delay in delivery of vacant possession by a developer to the purchaser, the period for delivery of vacant possession commences from the date the purchaser paid the booking fee and not the date of the sale and purchase agreement.
2. The Housing Development (Control and Licensing) Act 1966 ("HDA") and its subsidiary legislation are social legislation, which aim to afford statutory protection to homebuyers.
3. Date of completion of common facilities is the date of issuance of the Certificate of Completion and Compliance ("CCC").
4. Collection of booking fees is illegal.

INTERPRETATION

Surprisingly, although collection of booking fees has been a common practice, it is absolutely prohibited and illegal under Reg 11(2) of the Housing Development (Control and Licensing) Regulations 1989 ("HDR 1989"). The "contract of sale" as stated in Reg 11(2) of the HDR 1989 refers to the statutory sale and purchase agreement prescribed under the HDA which does not at all provide for such collection. Developers who collected booking fees are in express contravention of Reg 11(2) of the HDR 1989 and have committed an offence under Reg 13(1) of the HDR 1989. Anyone who solicits or advises or encourages the developers to do so have similarly committed an offence under Reg 13(1) of the HDR 1989.

The rationale behind the prohibition is understandable which is to accord maximum protection to a weaker class of persons from unscrupulous developers who having collected booking fees may take advantage by either procrastinating on construction of the housing project or formalisation of the sale and purchase agreement.

What is more important as between the purchasers and the developers is that if there is a collection of booking fees, then how should the liquidated...