Enforcing Vacant Possession Rights in Property Transactions: A Successful RM5,000 Settlement for Our Client
Property transactions in Malaysia are often perceived as routine conveyancing exercises. However, when one party refuses to honour clear contractual obligations, even a “completed” sale can quickly turn into a costly and stressful dispute.
This case demonstrates how firm legal strategy, careful contractual interpretation, and decisive action enabled our client to secure a RM5,000 settlement payment following an unlawful delay in the delivery of vacant possession.
The Background: A Completed Sale That Was Not Truly Completed
Our client entered into a sale and purchase agreement (“SPA”) for a residential property in Selangor at an agreed purchase price of RM650,000.
The SPA clearly provided for:
- Payment of a 10% deposit upon execution,
- Settlement of the balance purchase price within the stipulated completion period, and
- Delivery of vacant possession within a fixed timeframe after receipt of the balance sum.
The balance purchase price was duly paid through the purchaser’s housing loan and released to the vendor’s solicitors as stakeholders. There was no dispute that the full purchase price had been arranged and paid in accordance with the SPA.
However, problems arose when the vendor refused to deliver the keys and vacant possession, alleging that the purchaser had delayed completion and was liable for late payment interest.
The Core Dispute: Late Payment Interest vs Contractual Time Extension
At the heart of this dispute was a carefully drafted contractual clause allowing time extensions without interest in circumstances beyond the purchaser’s control.
The SPA expressly recognised that:
- Delays caused by land office processing,
- Delays in issuance of notices, receipts, or registration documents, and
- Administrative backlog at the land office
would qualify as time extended free of interest, provided the delay exceeded a specified number of working days.
In this case:
- The purchaser’s solicitors lodged the necessary documents promptly.
- The land office took more than 23 days to process and issue notifications, without rejecting or querying the application.
- The delay was confirmed to be caused by administrative backlog rather than any fault of the purchaser.
Despite receiving documentary proof and detailed explanations, the vendor persisted in demanding late payment interest and withheld the keys, effectively denying the purchaser access to the property.
Why the Vendor’s Position Was Legally Unsustainable
The vendor’s refusal to deliver vacant possession was inconsistent with several material provisions of the SPA, including clauses that expressly prohibit withholding keys once the balance purchase price has been paid, subject only to legitimate and quantified outgoings.
Crucially:
- There were no outstanding outgoings payable by the purchaser.
- The vendor had not fully settled certain statutory charges themselves.
- The SPA did not permit unilateral refusal to deliver vacant possession based on disputed interest claims.
Under the SPA, delivery of vacant possession was a material obligation, not a discretionary act.
By withholding the keys, the vendor exposed themselves to liability for late delivery interest, calculated daily based on the purchase price.
Our Legal Strategy: Clear Position, Strong Evidence, No Concessions
Our firm acted decisively to:
- Compile a full documentary chronology demonstrating land office delays.
- Invoke the contractual time extension clause strictly in accordance with its wording.
- Reject the late payment interest demand with reasoned legal justification.
- Formally demand delivery of vacant possession within a final extended deadline.
- Preserve the client’s right to claim late delivery interest under the SPA.
Despite multiple opportunities to resolve the matter amicably, the vendor continued to withhold vacant possession for nearly two months.
At that point, litigation became unavoidable.
Litigation Pressure and Commercial Reality
Once proceedings were commenced, the legal position became difficult for the vendor to ignore.
The claim was grounded in:
- Clear contractual breaches,
- Objective documentary evidence,
- A daily accruing financial exposure for late delivery of vacant possession, and
- The vendor’s refusal to engage constructively despite repeated explanations.
Shortly after court action was initiated and pressure mounted, the vendor released the keys and entered settlement discussions.
The Result: RM5,000 Settlement in Favour of Our Client
The matter ultimately concluded with a RM5,000 settlement immediately paid to our client out of a claim sum of RM 6,000, reflecting:
- Compensation for late delivery of vacant possession,
- Recognition of the vendor’s contractual breach, and
- Avoidance of further litigation costs and risks.
For our client, this meant not only financial recovery, but also affirmation that contractual rights under an SPA are enforceable — even against unreasonable resistance.
Key Legal Lessons from This Case
This case highlights several important principles relevant to property buyers and investors:
1. Contractual Clauses Matter
Time extension and interest clauses are not “boilerplate”. When properly drafted, they offer powerful protection against administrative delays beyond a buyer’s control.
2. Vacant Possession Is a Material Obligation
A vendor cannot withhold keys merely to exert pressure over disputed sums, especially where the SPA does not permit such conduct.
3. Delay Can Be Costly
Late delivery interest accrues daily and can quickly exceed the amount originally disputed.
4. Litigation Is Sometimes Necessary
When one party refuses to act reasonably, decisive legal action can shift the balance and lead to a commercially sensible settlement.
How Our Firm Adds Value in Property Disputes
This successful outcome reflects our firm’s approach to property-related disputes:
- Meticulous contractual analysis,
- Strong documentary preparation,
- Firm but strategic correspondence, and
- Willingness to litigate when necessary.
We do not merely process transactions — we protect our clients’ rights when things go wrong.
Facing Delays or Withheld Vacant Possession?
If you are experiencing:
- Unjustified refusal to release keys,
- Disputes over late payment interest,
- Delays caused by land office processing, or
- Vendor non-compliance with SPA terms,
early legal intervention can make a decisive difference.
This case demonstrates that even when the other side appears entrenched, a strong legal position — properly enforced — can lead to a favourable settlement.
Written on: 9th January 2026
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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!