Page 55 - Interactive report Ar Site Practice

HOW LAD APPLIES

LAD is not an automatic and legally required part of all construction contracts. Although,
thankfully in standard contract law, it is almost always included. If you’re buying a new
development property in Malaysia, then the likelihood is that a LAD clause will appear in
the Sale and Purchase Agreement (SPA).

Claiming LAD should be a fairly simple process. If a project runs beyond the agreed
completion date before possession is given, then the clause is triggered. A letter of demand
to the developer stating the clause and agreed LAD rate should then result in the employer
receiving payment.

This will essentially be a clause that outlines the process and financial implications if the
project delivery is delayed.

If you’re buying a strata-titled property in Malaysia for example, then Schedule H, Clause
25 of the prescribed SPA notes that:

“25. (1) Vacant possession of the said Parcel shall be delivered to the Purchaser in the
manner stipulated in clause 27 within thirty-six (36) months from the date of this
Agreement.

(2) If the Developer fails to deliver vacant possession of the said Parcel in the manner
stipulated in clause 27 within the period stipulated in subclause (1), the Developer shall be
liable to pay to the Purchaser liquidated damages calculated from day to day at the rate of
ten per centum (10%) per annum of the purchase price from the expiry of the period
stipulated in subclause (1) until the date the Purchaser takes vacant possession of the said
Parcel.”