Property Friday: Water, Electricity & Defects – Understanding a Developer’s Obligation After Vacant Possession

Under the HDA 1966 and HDR 1989, a developer must ensure water and electricity are “ready for connection” to the property at the time VP is delivered.

Under clause 1(k) of the statutory SPA, “ready for connection” means:

✅Electrical points and water fittings have been installed by the developer. 🔌🚿

✅Tested and commissioned by the appropriate authority or its authorised agent. 📝

✅Supply is ready for tapping into individual parcel units, and not merely to a communal substation. 🏘️

Remeggious Krishnan v SKS Southern Sdn Bhd [2023] 4 CLJ 36, FC is the leading authority. The developer delivered VP within 36 months but electricity was only connected two months later due to a delay in applying to TNB.

Federal Court held:

“It must follow that there was an obligation on the developer to provide actual supply of water and electricity to the property. The delivery of vacant possession was invalid since there was no electricity supply connected at the time.”

The HDA 1966 is social legislation — every provision must be interpreted to ensure maximum protection for purchasers against developers.

 

Examples of Malaysian Case Law

• Hoya Holding Sdn Bhd v Chin Thin Hing @ Cheah Thin Heng & Anor [1994] 4 CLJ 992, HC — Water and electricity must run through the internal pipes and powerlines before VP can be considered timely.
• Syarikat Kemajuan Perumahan Negara Sdn Bhd v Lee Cheng & Anor [2005] 4 CLJ 137, CA — Laying cables to the substation is insufficient. The developer must energise the water and electricity flow into the building. Supply must be ready for tapping.
• Bandar Utama Development Sdn Bhd v Management Corporation of Sunway Damansara (and Another Appeal) [2017] 9 MLJ 735, CA — Developer responsible for providing essential services including water and electricity to property owners. Failure constitutes breach of contract.
• Remeggious Krishnan v SKS Southern Sdn Bhd [2023] 4 CLJ 36, FC— VP without electricity supply is invalid VP. Purchaser suffered losses being deprived of the right to utilise and enjoy the property.

Possession vs Occupation

Icon City Development Sdn Bhd v K- Shin Corporation Sdn Bhd [2022] 9 CLJ 827, CA drew an important distinction — especially relevant for commercial properties:

• Possession: Physical control of the property. VP is the transfer of possession
• Occupation: The right to actually inhabit or use. Requires a CCC — a separate regulatory approval.

For commercial properties, VP can be validly delivered without a CCC as the two are separate events. However, for residential property — where VP requires utilities under the SPA — the distinction is narrower and developers remain bound to provide actual supply.

 

3 Types of Defects

• Structural defects 🏢

Cracks in walls, foundations, roof leaks, beam failures. Highest risk. Can lead to building collapse. Must be addressed with utmost urgency.

• Cosmetic defects 🫟

Scratches, dents, paint flaws, misaligned tiles, surface blemishes. Lower severity. Usually resolved through minor repairs or touch-ups.

• Utility defects 🔌

Faulty plumbing, electrical wiring, gas lines, HVAC systems. Significantly impacts daily use and enjoyment of the property.

All three types can arise even after VP has been accepted, due to the complexity of construction projects.

 

Defect Liability Period (DLP)

• 24 months DLP from VP date 🔐

• 30 days to rectify after written notice 📝

During the DLP, the developer is legally obligated to repair and rectify any defect at no cost to the purchaser. 🛠️

Common defects covered: structural cracks, roof leaks, faulty plumbing, electrical failures, and poor-quality fittings.

How to trigger the DLP

• Give the developer written notice of the defect. The 30-day rectification clock starts from the date of receipt of that notice.
• Document everything — photographs, dates, written records. 📷📆📄

 

Latent Defects – Time Limits ⌛

Hidden (latent) defects are governed by Section 6A, Limitation Act 1953:

General contract claims:

• 6 years from when the cause of action accrued.

Negligence claims:

• 3 years from the date the plaintiff first had knowledge of the damage and the right to sue — even if years after VP.

Absolute longstop:

• 15 years from when the defect first arose — regardless of when you discovered it.

Cekap Mesra Development Sdn Bhd v Che Seman Abdullah [2021] 1 LNS 1817, HC — Action filed in January 2021 for defects that arose in 2002 was time-barred. Even applying the deferred limitation under s.6A, the deadline had passed. Don’t wait.

 

Once you accept VP and begin renovations, you may be legally barred (estopped) from claiming the developer delivered the wrong unit or defective property ⛔

 

Country Garden Danga Bay Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor [2022] 5 CLJ 173, FC

A purchaser accepted VP and renovated, then claimed the unit lacked the covered balcony shown in the display model. The Federal Court held: having accepted delivery and carried out renovations, he had affirmed the contract as it stood. He could not blow hot and cold.

Similarly in TTDI Jaya Sdn Bhd v Yew Hong Teng & Anor [2017] 1 CLJ 436, homebuyers who accepted VP and continued paying their housing loans were estopped from claiming total failure of consideration for delay and defects.

 

For further information, please contact us at Miranda & Samuel:

• Dato’ George Miranda (george@mirandasamuel.com)
• Joy Sam Jia Qian (joy@mirandasamuel.com)
• Alisyah Maisarah (alisyah@mirandasamuel.com)

 

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