Guide to LAD Claims in Malaysia (Liquidated Ascertained Damages) - What should I do if the handover of the home I purchased is delayed?
If a developer fails to hand over the property on time—leaving you paying both a mortgage and rent while still waiting for the home—can you claim compensation?
Here is a clear explanation of LAD (Liquidated Ascertained Damages for late delivery of vacant possession) 👇
1️⃣ What is LAD?
LAD = Liquidated Ascertained Damages (compensation for late delivery of the property).
If the developer fails to hand over the property within the stipulated timeframe, the buyer is generally entitled to claim compensation.
2️⃣ When can a claim be made?
| Situation | Advice |
|---|---|
| The property has been handed over | ✅ It is generally worth seriously considering pursuing recovery. |
| The property hasn’t been handed over yet | ⚠️ Don’t rush just yet; we need to see how S&P phrases it |
3️⃣ Can the claim become time-barred (expire)?
It is possible; it depends on the circumstances.
The most common scenario: The developer delays handover → handover eventually takes place → the buyer pursues the claim. The time period usually starts counting from the date of handover.
If you challenge the “Extension of Time” (EOT) clause in the Sale and Purchase Agreement (S&P), the issue of timing becomes more complex.
4️⃣ When does the LAD calculation begin?
LAD is determined by comparing the handover deadline stipulated in the S&P against the actual handover date.
⚠️ In some cases, the booking fee or the date of the earliest payment must also be considered. A developer cannot collect money upfront, delay signing the S&P for a long time, and then claim that the calculation period only begins from the date of the S&P.
5️⃣ What if the developer claims there is an EOT (Extension of Time)?
A developer’s claim of an EOT is not automatically valid. Certain EOTs may themselves be legally flawed.
The existence of an EOT does not mean you cannot claim, nor does it guarantee a win. It depends on the specific documents and the actual circumstances.
Three key takeaways for buyers:
1️⃣ If a developer delays handover, you can generally claim LAD.
2️⃣ Whether the claim becomes time-barred depends on the specific circumstances.
3️⃣ To make an accurate assessment, you must review your S&P.
The most practical approach: Gather your S&P, booking fee receipt, and notice of handover. The answers lie within these documents.
⚠️ Disclaimer: This content provides general information on Malaysian law and is for reference purposes only.
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