Page 50 - ARCHITECTURE SITE PRACTICE

CALCULATING THE RATE OF LADS

- The cost of Liquidated Ascertained Damages can vary by
contract, although there is a standard calculation for a SPA
which can help guide your understanding.

- In general terms, LAD takes into account a whole range of
potential financial losses which a client

- might occur if the project is not delivered on time, such as:

Loss of rent
Loss of income
Storage costs
Additional rental costs
Fees or fines from third parties
Financing costs for loans etc

These are all foreseeable costs based on financial calculations
which are made, given the promised completion date.

SPA date = 01/07/2016
Completion date =
30/06/2019
Actual delivery of
vacant possession =
31/08/2019
Days of delay (from
30/06/2019 to
31/08/2019) = 63 days
LAD amount:
Purchase price
(RM100,000) x
interest
(10%) x 63 days =
RM1,726.03
Divided by 365

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