Liquidated Ascertained Damages (LAD) – the Current Position for Housebuyers in Sarawak for late delivery of homes by a Developer

The Federal Court’s decision in the case of Anna Chin Kui Lien v RJ Realty & anor and other appeals [2025] 2 CLJ 204 has cemented the legal position in Sarawak on calculation of liquidated ascertained damages (LAD) for purchases of residential buildings under construction by  a developer.

In a scenario whereby the 36  month statutory time period provided for in the Sale and Purchase Agreement has been exceeded due to a Developer’s late delivery of vacant possession, and the housebuyer wishes to claim penalties in the form of LAD, calculation of the said LAD payable to the housebuyer would start from the date of payment of booking fee from the housebuyer to the developer in the event there was any payment of booking fee. If there was no booking fee paid, time would run from the date of the Sale and Purchase Agreement.

The rationale of the Court’s decision was that the Sarawak Housing Developers (Control & Licensing) Ordinance 2013 is social legislation, and as such, courts must interpret it in favour of homebuyers. Further, Regulation 9(4) of the Sarawak Housing Development (Control and Licensing) Regulations 2014 prohibits collection of any payment - including booking fees - except as provided in the Sale and Purchase Agreement (ie the 10% Deposit). Should time be permitted to run from the date of a Sale and Purchase Agreement and a booking fee was paid many months prior, the housebuyer would be placed at substantial disadvantage.

As such, the current position of law is that when it comes to calculation of LAD for late delivery of residential houses, time runs from the first payment of any deposit or booking fees paid by the homebuyer to the Developer.