When you purchase a new home, you will need to sign a purchase and sale agreement (SPA) with the developer. In the SPA, the deadline for delivery is clearly stated. Usually a landed house has to be delivered to the buyer within 24 months and a condominium has to be delivered to the buyer within 36 months.
If the developer does not deliver the property to the purchaser after 24 or 36 months, then the developer will have to pay compensation to the purchaser. Compensation for late delivery will be calculated in days and the percentage of compensation will be clearly stated in the purchase and sale agreement.
The typical late payment rate for Upper West Peninsula developers is 10%, but the rate will be based on the number in the purchase and sale agreement. Be sure to read the terms and conditions when signing the sale and purchase agreement. This is calculated by multiplying the price of the property by 10%, multiplying it by the number of days of late delivery, and dividing it by 365 days.
Amount of compensation = price of the house X 10% X number of days late / 365 days
Example 1: Suppose the price of the house is RM500,000, the contract date is 1 January 2020 and the original delivery date is 31 December 2022. However, the developer delivers the house on July 1, 2023, which means the developer delayed the delivery of the house by 181 days. The developer has to pay RM24,795 to the buyer.
RM500,000 X 10% X 181 / 365 = RM24,795
If the developer is not willing to pay the late delivery compensation, the buyer can claim through the Housing Tribunal or file a court action through a lawyer.
