Hasnal & Partners, Advocates & Solicitors

25/09/2026

Can owner of a development property ie strata or landed seek damages from Developer for failure to deliver individual title/strata title within the completion period under the premise of vacant possession?

The Judgment Express for this week is the Court of Appeal case of Mayland Universal Sdn Bhd v. Kong Aik Weng & Ors. The appellant was the developer of a service apartment project known as Residensi Dorsett Sri Hartamas, and the respondents were purchasers of units in the development who had each entered into sale and purchase agreements (“SPA”) governed by the Housing Development (Control and Licensing) Act 1966 and Schedule H of the Housing Development (Control and Licensing) Regulations 1989.

Clause 25(1) of the SPAs required the appellant to deliver vacant possession within 36 months from the date of the SPAs, failing which liquidated damages were payable under cl 25(2);

cl 27(1) prescribed the manner of delivery, including issuance of the separate strata title; and cl 28(1) permitted the appellant to obtain the Controller's written certification to deliver vacant possession within the stipulated time if the strata title was not issued for reasons not attributable to the appellant.

In August 2018 the appellant applied for such certification, which was granted with conditional approval on 25 January 2019, and between March and June 2019, vacant possession was delivered to the respondents within the 36-month period, although the separate strata titles had not by then been issued and the Controller's certification was not furnished together with the delivery.

The respondents commenced an originating summons claiming liquidated damages under cl 25(2), contending that their physical possession did not amount to 'delivery of vacant possession' under cl 25(1) as the separate strata title for their respective units had not been issued nor was the delivery of vacant possession accompanied by the Controller’s certification, rendering the delivery bad and defective.

The High Court allowed the respondents' claim, holding that the vacant possession delivered was incomplete and defective and that the respondents were entitled to liquidated damages, hence the instant appeal.

The issues before the Court of Appeal were whether the High Court had erred in conflating the manner of delivery of vacant possession with the time of delivery of vacant possession; whether delivery without the separate strata title constituted a breach of cl 25 of the SPA; and whether an award of liquidated damages would unjustly enrich the respondents.

The Court of Appeal, in allowing the appellant's appeal and setting aside the High Court's order, held inter alia that

1. the High Court had erred in law by conflating the manner of delivery of vacant possession with the time of delivery;

2. that based on Remeggious Krishnan v. SKS Southern Sdn Bhd, ‘the time frame for delivery of vacant possession’ was separate from ‘the manner of delivery of vacant possession’ and that a breach in the manner of delivery could not trigger a claim for liquidated damages for late delivery;

3. that the breach, if any in this instance, related only to the manner of delivery under cl 27(1)(b) of the SPA and not to the time of delivery under cl 25(1), and so could not found a claim for liquidated damages under cl 25(2);

4. that compensatory damages under s 74 of the Contracts Act 1950 were the appropriate remedy instead, subject to proof of actual loss;

5. that the appellant, having satisfied the manner of delivery under cl 27 through the saving provision in cl 28(1) by obtaining the Controller's certification, had fulfilled its obligations under cls 25(1) and 27(1); and

6. that the failure to furnish the certification together with the delivery amounted at most to a trivial breach of cl 28(1) which could be compensated with compensatory damages and not liquidated damages; and

7. that allowing the liquidated damages claim would unjustly enrich the respondents and defeat the true purpose of cl 25(1) of the SPA, contrary to the principles in Obata-Ambak Holdings Sdn Bhd v. Prema Bonanza Sdn Bhd & Other Appeals.

21/09/2026

https://www.nst.com.my/news/nation/2026/09/1537644/court-rules-developer-cannot-turn-common-property-private-assets?

PUTRAJAYA: The Court of Appeal has ruled that a property developer cannot turn areas meant for residents' common use into private property before selling them or using them as security for bank loans.

18/09/2026

One of the tax benefit under Hibah Mutlak or gift to immediate family member.

Giving away a property is still treated as a disposal under the Real Property Gains Tax Act, even though no money changes hands. Ordinarily, a gift is taxed as if the property were sold at its market value on the date of the transfer.

The law softens this for transfers within close family. Where the person giving the property and the person receiving it are husband and wife, parent and child, or grandparent and grandchild, and the giver is a Malaysian citizen, the giver is treated as having made no gain and suffered no loss on the gift.

The recipient does not get a fresh, higher starting point either. The recipient simply takes over the giver's original acquisition price exactly as it stood, which already accounts for costs the giver paid at the time such as legal fees and stamp duty. On top of that unchanged figure, the recipient also inherits any separate cost the giver later spent on improving the property or defending title to it, which the law treats as its own distinct category of allowable expense.

This means the tax is not cancelled by the gift, only delayed. When the recipient eventually sells the property, the gain is measured from the original owner's cost, not from the property's value on the day it was gifted.

Families planning to pass property down should keep the original purchase documents, since that is the figure that will matter when the next sale happens.

17/09/2026

16/09/2026

STAMPING DOCUMENT UNDER THE STAMP ACT 1949

Stamping a document in Malaysia follows a fixed sequence, and each step has its own requirement. Understanding the full path helps a business avoid unnecessary delays, mistakes or penalties along the way.

The process begins with registration. Every party to the document must have a Tax Identification Number before an application can even be made. The duty payer then logs into the MyTax portal and selects the correct declaration form for the type of document being stamped, choosing from security, rental or general categories, before uploading the document itself together with any supporting papers.

From there, assessment happens in one of two ways. Under self-assessment, the system calculates duty automatically once the form is submitted, and the submission is treated as though it has already been assessed by the Collector on that date. Under formal assessment, the completed form is instead sent to LHDN, and the duty payer must wait for a formal notice stating the amount payable before proceeding further.

Payment follows, with thirty days given for a self-assessed submission and fourteen days for a formal one. The final step is printing the stamp certificate and attaching it to the document. Only once this certificate is in place is the document considered duly stamped and legally valid.

Missing any step along this chain, particularly the final payment and certificate stage, can result in penalties for late stamping under the Stamp Act 1949.

10/09/2026

Non-Malaysian citizens and non-permanent residents pay a Real Property Gains Tax (RPGT) of 30% on profits if they sell a Malaysian property within the first 5 years, and 10% for any sales in the 6th year and beyond.

RPGT Rates for Foreigners

- Year 1 to Year 5: 30% on the net chargeable gain.

- Year 6 and above: 10% permanent floor rate on the net chargeable gain (unlike citizens who drop to 0% after 5 years).

Key Rules and Requirements

- No 0% Rate: Foreigners never reach a 0% RPGT rate, regardless of how many years they hold the property.

- No Private Residence Exemption: Foreigners do not qualify for the once-in-a-lifetime private residence exemption available to Malaysians.

- Automatic Exemption: Foreign individuals can still claim an automatic exemption of RM10,000 or 10% of the chargeable gain, whichever is higher.

- 7% Retention Sum: When a foreigner sells a property, the lawyer handles a 7% retention mechanism by withholding 7% of the total disposal price to remit to the Inland Revenue Board of Malaysia (HASiL).

- Filing Deadline: CKHT forms (such as CKHT 1A and CKHT 2A) must be filed within 60 days of the disposal date.