NEW PROPERTY PURCHASER’S GUIDE: LATE DELIVERY OF VACANT POSSESSION DURING MCO 3.0 & LAD

In this article, we will discuss the implications of the COVID 19 (Amendment) Act (Covid-19 Act) to new homeowners affected by the MCO 3.0 and the calculation of Purchaser’s Liquidated Ascertained Damages (LAD), if any.

The date for the handover in your standard Sale and Purchase Agreement (SPA) is generally limited to 36 months for properties with a strata title (i.e apartments) and 24 months for properties with an individual title (i.e. landed properties) calculated from the payment of the Booking Fee.

 

Hence, if your new home is not handed over to you within that stipulated time frame, the SPA will allow you to claim for LAD.

Our Federal Court ruled that the time for delivery of Vacant Possession runs from the date of payment of the Booking Fee.

Under the SPA, you are generally deemed to have taken delivery of vacant possession after the expiry of Thirty (30) Days from the date of the Developer's Letter for Delivery of Vacant Possession (Notice of VP), irrespective of whether you have entered into possession or occupation of your Property.

A quick answer is NO.

 

The COVID-19 Act, which came into effect on 13 January 2022, states that if the Purchaser cannot take possession of the Property from the date of the Developer's letter during MCO 3.0, then the Purchaser shall not be deemed to have accepted such vacant possession.

 

The modification brought about by Section 38D is significant as Purchasers shall only be deemed to have taken vacant possession on the date of actual delivery of possession by the Developers, i.e. on the day the Purchasers collect their keys and take possession of their properties.

As a result of the amended Covid-19 Act, a purchaser can now claim higher Liquidated Ascertained Damages (LAD) from the Developer.

 

This is because the calculation of the LAD would now be extended to a period longer than the Thirty (30) Days stipulated in the Developer's letter in the event the Purchasers had collected their keys and vacant possession after the expiry of the Thirty (30) Days.

 

In simpler terms, the Purchaser would be able to claim LAD up to the date they had collected their keys and take possession of their properties, notwithstanding the expiry of the Thirty (30) Days in the Developer's letter.

Suppose you find yourself in a situation where the Developer has failed to fulfil its obligation under the SPA to hand over vacant possession to you on a specific date. It would be best if you consider inviting other purchasers with similar grievances under the same project to initiate a Representative Action or generally known as Class Action against the Developer.

When a group of purchasers who have been injured in a similar manner can file a single lawsuit against the Developer to seek compensation as a group, this is known as the Class Action or Representative Action.

 

Some of the advantages include:-

 

(a) The opportunity for you to seek relief for smaller amounts of money as it gives your seemingly small claim more options when combined with other similarly affected purchasers; and

 

(b) Low litigation costs. When you pursue litigation during a Class Action lawsuit, it will not cost you nearly as much as if you attempted to file an individual claim. That is because all of the Plaintiffs are splitting the costs equally.


Please speak to our lawyers today.

At CHERN & CO., we can help you fight back against large and powerful property Developers and companies. You do not need to feel intimidated by the class action process. Take the first step now and contact us at +603 6419 9511 or Email us at info@chernco.com.my to discuss your specific legal situation

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