Getting Your Keys: What to Check When the Developer Hands Over Your Home

Under Schedule G and Schedule H, the sale agreement forms set by the housing regulations for homes sold under the HDA, the housing development law (see our HDA guide), the developer must let you take the keys once the CCC (Certificate of Completion and Compliance) is issued, water and electricity are ready for connection, you have paid what is due, and the other conditions below are met. From that day the 24-month defect period runs, your maintenance charges start, and 5% of the price is held back by the developer’s lawyer.

This guide covers homes sold under the HDA on Schedule G (landed homes) or Schedule H (strata homes, in a building split into separately owned units, such as condos). It follows the forms as set in 2015. We did not check the sale agreements used in Sabah and Sarawak. For the rest of the agreement, see our SPA guide.

What must be ready before you get your keys

The agreements call the handover “vacant possession” (the empty home handed to you with its keys). Under Schedule H, the developer must let you take possession once all of these are in place:

• The CCC has been issued.
• The separate strata title (your unit’s ownership papers) has been issued.
• Water and electricity supply are ready for connection to your unit.
• You have paid all sums due under the agreement and kept to its terms.
• Any changes or extra work under the agreement, if there are any, are finished.

Schedule G, for landed homes, has the same list without the strata title.

Schedule H says what “ready for connection” means: the electrical points and the water fittings inside the unit have been installed by the developer, can work fully, and the supply is ready to be used.

If the strata title has not been issued for a reason the developer did not cause, the developer may apply in writing to the Controller (the HDA’s housing officer) for a certificate to hand over without it. The handover must then come with a copy of that certificate.

Both forms say the handover must be supported by the CCC and includes handing over the keys.

The notice and the 30 days

The developer sends you a written notice asking you to take possession. A notice sent by registered post counts as received 5 days after the day it was posted.

When 30 days have passed from the date the notice is served, the agreement treats you as having taken vacant possession. That holds whether or not you have collected the keys or moved in.

The developer has 36 months from the date of the agreement to hand over a strata home, and 24 months for a landed home. If it is late, it owes you LAD (fixed damages for late delivery) of 10% a year on the price, counted day by day until you take vacant possession. It must pay this right after it gives the notice. If it does not, you may deduct the LAD from any instalment of the price you still owe. Our HDA guide has a worked LAD sum.

What you pay at handover

The payment table in both forms has three lines on the day you take vacant possession:

• 17.5% of the price, on that day, with water and electricity ready for connection.
• 2.5% more on that day, once the developer has handed you or your lawyer the papers. For a strata home, that is the transfer document in your name with the original strata title. For a landed home, it is the original title for the lot, registered in your name.
• 5%, held by the developer’s lawyer as stakeholder (a middle person who keeps money until conditions are met). The lawyer pays 2.5% to the developer 8 months after you take vacant possession, and the other 2.5% after 24 months.

Other costs start that day too:

• Strata maintenance. From the date you take vacant possession, you pay the developer the maintenance charges and the sinking fund (savings for big future repairs). The first four months are paid in advance at handover, then one month in advance each time. While the developer runs the building, the sinking fund is 10% of the charges. The Strata Management Act 2013 bars anyone from collecting either before you get vacant possession. See our maintenance fee guide.
• Landed service charges. Under Schedule G, you pay a share of the services from the date you take vacant possession. The first six months are paid at handover, then one month in advance from the seventh month.
• Meter deposits. You pay the deposits for the water, electricity and gas (if any) meters within 30 days of the developer’s notice asking for them.
• Quit rent and assessment. The agreement makes you responsible for quit rent (cukai tanah, the land tax), assessment (cukai taksiran, the property tax) and the other charges on the home from the date you take vacant possession or the date the home is transferred to you, whichever comes first.

These figures are made up, to show the maintenance sum. If the charges are RM400 a month, the first four months at handover are 4 × RM400 = RM1,600. The sinking fund is 10% of that, RM160. Together you pay RM1,760 that day.

For a strata home, the developer insures the building against fire until it hands over your unit. After the CCC is issued and you take vacant possession, you share that duty with the developer and the other buyers under the Strata Management Act 2013.

The 24-month defect period

Under Schedule H, a defect, shrinkage or other fault that shows up within 24 months after you take vacant possession must be repaired by the developer at its own cost. It has 30 days from receiving your written notice. This covers your unit, the building and the common property (the shared parts). The fault must come from bad workmanship or materials, or from the home not being built to the approved plans and description. Schedule G has the same rule for a landed home, covering the building.

The agreement asks only for a written notice. It sets no form. You can send it by registered post or hand it over.

If the developer does not repair it within the 30 days, you may do the work yourself and recover the cost from the developer, including by deducting it from the 5% the developer’s lawyer holds. The steps are:

1. Tell the developer the cost of the repair before you start.
2. Give the developer 30 days, from the day you tell it you plan to do the work, to do it itself.
3. If it still does not, start the work as soon as you practically can.

The lawyer must then release that cost to you within 30 days of getting your written demand stating the amount.

One step protects the 5%. If you deliver a copy of your written defect notice to the developer’s lawyer before the 8-month or the 24-month release date, the lawyer must not pay that 2.5% to the developer. It stays until the lawyer receives a certificate signed by the developer’s architect saying the defect has been repaired.

If you need to claim

The Tribunal for Homebuyer Claims (where buyers can file a claim against a developer) hears claims of up to RM50,000 each. KPKT’s buyer guide says that above RM50,000 you have the option of a lawyer and the civil court. KPKT’s tribunal FAQ gives each filing limit as 12 months:

• LAD and other claims under the sale agreement: from the date the CCC is issued.
• Technical claims, such as defects: from the end of the defect period.
• If your agreement was ended before the CCC was issued: from the date it ended.

What KPKT tells buyers to check

KPKT’s buyer guide says you should receive a notice of vacant possession from the developer, and make sure you have:

• the key-handover letter or the vacant possession notice
• the title, individual or strata
• every door key, including the main door, the kitchen door and all the room doors
• the CCC

After you get the keys, it says to check the house for defects in workmanship and for anything that differs from your sale agreement. You may appoint a house inspection agency to do this, at your own cost. We found no fuller official checklist.

What to check at handover

• What date was the notice served? Count 30 days from it.
• Has the CCC been issued? Ask for a copy.
• For a strata home: has the strata title been issued, or do you have a copy of the Controller’s certificate?
• Are the electrical points and water fittings installed and working?
• Do you have every door key?
• Does the bill match the payment table: 17.5%, 2.5% with the title papers, and 5% held by the lawyer?
• Does the maintenance bill cover four months (strata) or six months (landed)?
• Was the handover late? Has the LAD been paid, or will you deduct it?
• Walk every room. Write down each defect and send a written notice to the developer.
• Send a copy of each defect notice to the developer’s lawyer.
• Mark the dates: 30 days for each repair, 8 and 24 months for the releases, and 12 months after the defect period ends for a tribunal defect claim.

This is a general guide, not legal or financial advice, and rules and sale agreement terms can change. Check your own agreement with your lawyer.