LAD for property in Malaysia: how late delivery compensation works and how to claim
If a developer hands over your new home late, the statutory sale and purchase agreement (SPA) makes it pay you liquidated damages at 10% a year of the purchase price, calculated from day to day, for every day past the delivery deadline. This compensation is called LAD (liquidated ascertained damages), and for property in Malaysia the rate is fixed by law.
The rules sit in the Housing Development (Control and Licensing) Act 1966 (HDA) and its regulations, which KPKT, the Ministry of Local Government Development, administers. Federal Court decisions since 2019 have changed when the deadline starts and how extensions of time work, so older explainers can be out of date.
This guide covers the LAD property rules in Malaysia, the 24 and 36 month delivery periods, how to calculate LAD with a worked example, common facilities, extensions of time, claims at the Tribunal for Homebuyer Claims and how to check a project before you book.
Quick answer: If the developer misses the delivery period in your SPA (24 months for landed homes, 36 months for strata units), it owes you LAD at 10% a year of the purchase price, day by day, until you get vacant possession. The Federal Court ruled in 2021 that the period runs from the date you paid the booking fee. Claims up to RM50,000 can go to KPKT's Tribunal for Homebuyer Claims for a RM10 filing fee, within 12 months of the certificate of completion and compliance (CCC) or the end of the defect liability period.
What LAD is and where it comes from
LAD is a fixed amount of compensation that the SPA sets in advance for late delivery, so you do not have to prove what the delay cost you. For new homes from a licensed developer, the law fixes the form of the SPA. Regulation 11(1) of the Housing Development (Control and Licensing) Regulations 1989 says the contract of sale must be in the form prescribed in the regulations.
Two forms cover most new launches. Schedule G is for a house sold with its land, such as a terrace or semi-detached home. Schedule H is for a parcel in a subdivided building, such as a condominium or serviced residence, which is sold under strata title.
Because these are statutory contracts, the delivery period and the LAD rate are written into the form itself. The Federal Court has described the HDA as social legislation meant to protect buyers, and said the courts will not countenance the bypassing of statutory safeguards meant for purchasers.
The HDA covers Peninsular Malaysia and Labuan. Sabah and Sarawak have their own housing laws, though the Federal Court applied the booking-fee rule to Sarawak homebuyers in March 2025. A lawyer can confirm which law and which version of the schedule applies to your SPA.
Delivery periods: 24 or 36 months, and when the clock starts
The schedule sets how long the developer has to deliver vacant possession (VP), the point when you get the keys. Under the Schedule G form, VP is due within 24 calendar months. Under the Schedule H form, VP is due within 36 calendar months. Both periods are stated to run "from the date of this Agreement".
| SPA form | Used for | Delivery period for VP | Common facilities |
|---|---|---|---|
| Schedule G | House with land (landed) | 24 calendar months | No separate clause |
| Schedule H | Parcel in a strata building | 36 calendar months | 36 calendar months, with their own LAD |
Source: Housing Development (Control and Licensing) Regulations 1989, Schedules G and H, 2007 text (as of 28 Oct 2026)
The clock starts on the booking fee date
Developers often collect a booking fee weeks before the SPA is signed. In PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah, decided on 19 Jan 2021, the Federal Court held that the date for calculating LAD begins from the date of payment of the deposit, booking fee or the buyer's written intention to purchase, not from the date printed on the SPA.
The court also confirmed that collecting booking fees is prohibited, because regulation 11(2) says no developer may collect any payment except as the SPA prescribes. Keep your booking fee receipt: it is the evidence for your start date.
What counts as delivery
VP means more than a handover of keys. The schedules require a certificate of completion and compliance (CCC) for the building, water and electricity ready for connection, and the buyer having paid all sums due. Once the developer sends a notice to take possession, you are treated as having taken VP 14 days later, whether or not you collect the keys.
These rules come from the 2007 text of the schedules and the Federal Court cases that cite them, so have a lawyer check the current terms of your own SPA.
How to calculate LAD, with a worked example
LAD for late VP is calculated at 10% a year of the full purchase price, from the day after the delivery period ends until the day you take VP. The schedules say it is calculated from day to day, so you work out a daily rate and multiply it by the days late.
The formula is: purchase price x 10% x days late / 365.
Example: Say you book a RM500,000 condo under a Schedule H SPA. You pay the booking fee on 1 Mar 2027 and sign the SPA on 15 Apr 2027. There is no extension of time. VP due, counting 36 months from the booking fee date: 1 Mar 2030. The developer delivers VP with a CCC on 1 Sep 2030: 184 days late. Daily LAD: RM500,000 x 10% / 365 = RM136.99. LAD: RM500,000 x 10% x 184 / 365 = RM25,205.48.
If the 36 months were counted from the SPA date, VP would be due on 15 Apr 2030, the delay would be 139 days, and LAD would be RM19,041.10. Counting from the booking fee date adds 45 days and RM6,164.38.
The schedules say LAD is payable by the developer immediately on the date you take VP, and that your right to claim it arises on that date. Some developers offer to set LAD against the final payment or pay it later; ask your lawyer before you sign anything that settles your claim.
Common facilities and LAD
Strata projects have a second, smaller LAD. Clause 27 of the Schedule H form says the common facilities serving the development, such as the pool, gym or playground, must also be completed within 36 calendar months. If they are late, the developer pays LAD at 10% a year, day by day, but on the last 20% of the purchase price instead of the full price.
Example: On the same RM500,000 condo, the last 20% of the price is RM100,000. Daily LAD for common facilities: RM100,000 x 10% / 365 = RM27.40. If the common facilities are also 184 days late: RM5,041.10. Together with the LAD for late VP: RM30,246.58.
For common facilities, the Federal Court held in PJD Regency that the certification must be a CCC. The architect's certificate of practical completion (CPC) arises under the building contract, not the statutory SPA, so it does not count.
This LAD applies to strata units, because the Schedule G form in the 2007 text has no separate common-facilities clause. Your lawyer can confirm whether the current terms of your own SPA say the same.
Extensions of time: what they mean for your claim
An extension of time (EOT) lengthens the delivery period, so VP is due later and any LAD starts later. Under regulation 11(3), the Controller of Housing could waive or modify terms of the SPA for special circumstances, hardship or necessity. Many developers used it to get longer delivery periods.
In Ang Ming Lee v Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan, decided in November 2019 and reported in 2020, the Federal Court held that regulation 11(3) was ultra vires the HDA. The Chief Justice later explained that the Act gave the power to extend time to the Minister, not the Controller, so the extensions in that case were invalid and the developers had to pay LAD.
Ang Ming Lee applies only going forward
Ang Ming Lee has to be read with the Federal Court's later decision in Obata-Ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd, delivered on 26 Jul 2024. The court ruled that Ang Ming Lee applies prospectively, so developers that relied on extensions granted under the rules in force before it were protected.
The court also held that where the SPA you signed already stated a longer delivery period, such as 54 months instead of 36, there is no breach when the developer delivers within that stated period. In practice, the delivery period written into your SPA when you sign is usually the deadline that counts.
The same judgment applied the six-year limitation period of the Limitation Act 1953 to LAD claims filed in court, and dismissed claims filed too late. The Tribunal has its own 12-month deadline.
| What you see | What it usually means |
|---|---|
| SPA states 24 or 36 months, no extension | LAD runs from the end of that period |
| SPA already states a longer period when you sign | No breach while the developer is within that period |
| Extension approved after you signed | Its validity depends on who granted it, when and how: ask a lawyer |
Source: Federal Court, Obata-Ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd (as of 28 Oct 2026)
How an extension affects your claim depends on its facts and dates, so ask a lawyer to read the extension letter alongside your SPA before you make or settle a claim.
How to claim: the developer first, then the Tribunal for Homebuyer Claims
Most buyers start with a written claim to the developer, setting out the start date, the VP date, the days late and the amount. If the developer does not pay, KPKT's Tribunal for Homebuyer Claims (Tribunal Tuntutan Pembeli Rumah) hears claims arising from SPAs with licensed developers, including claims for late delivery of vacant possession. It has operated since 1 Jan 2003.
| What | Rule |
|---|---|
| Claim limit | RM50,000; above that, the Sessions Court, unless both parties agree in writing |
| Filing fee | RM10 |
| How to file | Download Borang 1, file 4 copies at the Tribunal's registry counter and pay the fee; 2 sealed copies come back to you |
| Lawyers | Not allowed at the hearing, unless the Tribunal allows it for a complex point of law and serious financial hardship |
| Deadline | Within 12 months of the CCC, the end of the defect liability period, or termination of the SPA |
| Award | Without delay and, where practicable, within 60 days of the first hearing day |
Source: KPKT, Borang 1 instructions and HDA 1966, Part IIA, as amended to 1 Jun 2015 (as of 28 Oct 2026)
The forms, including the Borang 1 checklist, are on KPKT's Tribunal forms page. KPKT's client charter aims to resolve Tribunal claims within 100 working days of filing. The Tribunal has offices in Putrajaya, Kuala Terengganu, Johor Bahru and Kepala Batas.
Deadlines and limits to watch
The 12-month deadline is easy to miss. The defect liability period in the schedules is 24 calendar months after VP, so the deadline based on its expiry usually falls 36 months after VP, but the deadline based on the CCC can come much sooner.
The RM50,000 limit applies to each claim. In Remeggious Krishnan v SKS Southern Sdn Bhd, the Federal Court held that a buyer may bring separate, distinct claims on the same property, each within the limit, though the Tribunal can refuse claims split only to get around it.
A developer that ignores an award commits an offence, with a fine of RM10,000 to RM50,000, up to two years' jail, or both. A lawyer can tell you whether your claim belongs at the Tribunal or in court, and which deadline applies.
How to check a project's delivery status before you book
Before you book, compare three things: the handover date the project's own record shows, the delivery period in the SPA you are given, and what the developer tells you in writing.
On PropLaunch, every project page shows "Handover promised in SPA" and, where one applies, "Handover after approved extension". Projects that are behind schedule carry a "Behind schedule" label in the projects list. Of 2,861 projects for sale, 115 were marked behind schedule and 652 showed a handover after an approved extension, most often by 12 months (PropLaunch listings, checked 28 Oct 2026).
Information, not an offer. Prices, availability and handover dates are as of the date shown; confirm with the developer before you book.
If the SPA states a longer period than the standard 24 or 36 months, get the developer's reason in writing. Your lawyer can check the SPA period, the booking fee receipt and any extension before you sign.
Frequently asked questions
How is LAD calculated for late delivery in Malaysia?
Multiply the purchase price by 10%, then by the number of days late, and divide by 365. On a RM500,000 home, that is RM136.99 a day. The days run from the end of the delivery period until the date you take vacant possession.
Does LAD start from the booking fee date or the SPA date?
From the booking fee date. The Federal Court ruled in PJD Regency, on 19 Jan 2021, that the delivery period runs from the date you paid the booking fee or deposit, not the date printed on the SPA. Keep your booking fee receipt as evidence.
Can I claim LAD if the developer got an extension of time?
It depends on when and how the extension was granted. Ang Ming Lee (November 2019, reported 2020) held the Controller's power under regulation 11(3) invalid, but Obata-Ambak (26 Jul 2024) ruled that it applies only going forward and that a longer period already in your SPA is not a breach. Ask a lawyer to look at your SPA and any extension letter.
How much does it cost to file a claim at the Tribunal for Homebuyer Claims?
The filing fee is RM10, paid when you file Borang 1 in 4 copies at the Tribunal's registry. Lawyers are generally not allowed at the hearing, which keeps costs low.
What is the deadline to file an LAD claim?
At the Tribunal, you must file within 12 months of the CCC, the end of the defect liability period, or the termination of the SPA. Court claims follow the six-year limitation period instead.
Can I claim more than RM50,000 in LAD?
The Tribunal can award up to RM50,000 per claim. A larger claim goes to the Sessions Court unless both parties agree in writing to keep it at the Tribunal. Separate, distinct claims on the same property may each be within the limit.
Do I get LAD for late common facilities?
Yes, if you bought a strata unit under a Schedule H SPA. The developer pays 10% a year on the last 20% of the purchase price, day by day, until the common facilities are completed, which the Federal Court has said means a CCC.
If your handover is late
Start with the dates: your booking fee receipt, the delivery period in your SPA, any extension letter and the date you took VP with a CCC. Work out the days late and the amount, put your claim to the developer in writing, and note your 12-month Tribunal deadline. A lawyer can check your figures and the extension position before you file or settle.
If you are still choosing a project, compare handover dates before you book. A registered estate agency arranges viewings and price lists.
This guide is general information, not financial, legal or tax advice. Rules and rates change; confirm the figures that apply to you with your bank, your lawyer or LHDN before you commit. PropLaunch is not a real estate agency.
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