Delayed Vacant Possession / LAD

Where there is a delay in the delivery of vacant possession by a developer to the purchaser in respect of Schedule G and/or H type contracts under Regulation 11(1) of the Housing Development (Control and Licensing) Regulations 1989 (Regulation 1989) enacted pursuant to Section 24 of the Housing Development (Control and Licensing) Act 1966, whether the date for calculation of liquidated agreed damages ('LAD') begins from:

(a) the date of payment of deposit/booking fee/initial fee/expression by purchase of his written intention to purchase; or (b) from the date of the sale and purchase agreement.

(1) Where a housing developer fails to deliver vacant possession within the time stipulated in the statutory sale and purchase agreement, the calculation of the liquidated ascertained damages ('LAD') begins from the date of payment of the booking fee and not from the date of the statutory agreement. This is further clarified and cemented by the nature of the Housing Development (Control and Licensing) Act 1966 and Housing Development (Control and Licensing) Regulations 1989 being social legislations. In interpreting a social legislation, the court must give effect to the intention of Parliament and not the intention of parties. Otherwise, the attempt by the legislature to level the playing field by mitigating the inequality of bargaining power would be rendered nugatory and illusory.

(2) While housing developers might think that it is a standard commercial practice to accept booking fees, the development of the law clearly suggests to the contrary. Where the developers act in contravention of the law, they have to accept the resulting consequences. The court would not countenance the by passing of statutory safeguards meant to protect the purchasers.

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