Case Commentary – Purchasers Win LAD Claim Against Developer(August 2025)
Date of Judgment: 13 August 2025
Court: High Court of Malaya, Shah Alam
Judge: YA Elaine Yap Chin Gaik
Case Type: Housing Development – Liquidated Ascertained Damages (LAD) Claim
Introduction
This landmark housing dispute involved 77 homebuyers of the Clover Taman Semarak Warisan housing project in Sepang, Selangor, who sued the developer, Zestran Sdn Bhd, for Liquidated Ascertained Damages (LAD) due to late delivery of their homes.
The second defendant, Delisprings Land Sdn Bhd (the landowner), was removed from the suit by consent. The case proceeded solely against the developer.
What is LAD and Why is it Important?
Liquidated Ascertained Damages (LAD) is compensation that developers must pay when they fail to hand over a property within the statutory period under the Housing Development (Control and Licensing) Act 1966 (HDA) and the Housing Development Regulations (HDR).
For homebuyers/Purchasers, LAD ensures they are compensated for the inconvenience and financial losses from delayed property delivery.
Key Legal Issues in the Case
1. When Does the LAD Period Start?
- Buyers’ Argument: LAD should be calculated from the booking fee payment date, not the date the SPA was signed.
- Developer’s Argument: LAD starts from the SPA date as stated in the agreement.
Court’s Decision:
Referring to the Federal Court case PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah, the court ruled that when booking fees are collected (even though technically prohibited), they signal the start of the deal. Therefore, LAD starts from the booking fee date.
2. When Does the LAD Period End?
Under Clause 26 of the SPA, vacant possession is deemed delivered when:
- The Certificate of Completion and Compliance (CCC) is issued, and
- Keys are handed over to the purchaser.
Court’s Finding: LAD ends on 18 March 2024, when the CCC was issued and delivery notice was given.
3. COVID-19 Delay Extension
The developer applied for and obtained a 153-day extension under the COVID-19 Temporary Measures Act 2020.
- Purchasers’ Argument: The extension should only apply to purchasers who booked before 31 May 2021.
- Court’s View: The law applies project-wide if the first SPA for the project was before 31 May 2021. Therefore, all buyers are subject to the 153-day extension.
4. LAD on Discounted Prices
- Developer’s Claim: LAD should be based on the discounted purchase price given to buyers.
- Court’s Decision: LAD must be calculated on the full SPA price before any discounts. Using discounts to reduce LAD would defeat buyer protection under housing law.
Judgment and Award
The High Court partly allowed the buyers’ claim and ordered:
- LAD at 10% per annum based on the full SPA price (before discounts).
- LAD computed from booking fee date minus 24 months + 153 days (COVID-19 EOT), ending on 18 March 2024.
- Total LAD Awarded: RM1,330,078.65
- Interest: 5% per annum from 18 March 2024 until full payment.
- Costs: RM1,000 per plaintiff/pair for each SPA.
Our Points to Note
- Booking fees matter – Even if not allowed by law, they can be used to start your LAD calculation.
- COVID-19 extensions are project-wide – If the project qualifies, all buyers are affected.
- Discounts don’t reduce your LAD rights – Developers cannot use rebates to pay less compensation.
- This case strengthens Malaysian homebuyers’ rights to claim full LAD compensation and reinforces the principle that developer delays must be fairly compensated.
If you are facing a similar housing dispute, you may be entitled to claim LAD from your developer.
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Disclaimer: The above proposition is subject to actual facts and circumstances and shall never be referred as the actual law without seeking legal advice. Consult us for more information!