Liquidated Ascertained Damages (LAD)

What are liquidated ascertained damages (LAD) in the context of property development in Malaysia?

In the context of property development, LAD refers to the pre-determined compensation agreed upon in a sale and purchase agreement (SPA) that the developer must pay to the purchaser if there is a delay in delivering vacant possession of the property. This is to compensate the purchaser for the inconvenience and losses incurred due to the delay.

How is LAD calculated for late delivery of vacant possession in Malaysia?

LAD is typically calculated based on the terms stipulated in the SPA. It is usually a percentage of the purchase price per day of delay, starting from the date the vacant possession was supposed to be delivered until the actual date it is handed over. The specific calculation formula is defined in the SPA.

What are the legal requirements for a purchaser to claim LAD for late delivery of vacant possession?

To successfully claim LAD, the purchaser must demonstrate:

• Existence of an LAD Clause: The SPA must include a clause specifying the LAD amount or formula.
• Proof of Delay: The developer failed to deliver vacant possession within the timeframe stipulated in the SPA.
• Evidence of Contract Compliance: The purchaser complied with all their obligations under the SPA, such as making timely payments.

Can a developer challenge the claim for LAD in Malaysian court?

Yes, a developer can challenge the claim for LAD on several grounds, such as:

• Force Majeure: Arguing that the delay was due to unforeseen circumstances beyond their control (e.g., natural disasters).
• Purchaser’s Breach: Claiming that the delay was caused by the purchaser’s actions or inactions, such as failure to make payments on time.
• Negotiated Extensions: Presenting evidence that both parties had agreed to extend the delivery date.

What is the process for claiming LAD in Malaysian court for late delivery of vacant possession?

The process involves the following steps:

1. Filing a Claim: The purchaser files a lawsuit against the developer in the appropriate court, citing the delay and the LAD clause in the SPA.
2. Submission of Evidence: The purchaser provides evidence of the SPA, the agreed delivery date, the actual delivery date, and the calculation of the LAD amount.
3. Developer’s Defense: The developer responds to the claim, potentially challenging the grounds for the LAD claim or providing justifications for the delay.
4. Court Hearing: Both parties present their cases, including any witnesses or expert testimony. The court examines the SPA, the circumstances of the delay, and any applicable laws.
5. Judgment: The court delivers a judgment, determining whether the LAD claim is valid and, if so, the amount of damages the developer must pay. The court may also consider any defenses or mitigating factors presented by the developer.

– – – – – – – – – – – –

Disclaimer

_{Articles published in this website are for general informational purpose only and shall not constitute any form of legal advice to any specific case. Kindly contact us if you are currently experiencing a legal dilemma related to this topic and need further legal consultation.}