Glossary
Vacant Possession (VP)
Vacant Possession (VP) is the formal handover of a completed property from the developer to the buyer. It marks the date when the buyer can legally enter, occupy, or renovate the property.
In Detail
VP is a critical milestone in the Malaysian property purchase timeline. For new launches, the developer is legally required to deliver VP within 36 months (for strata properties) or 24 months (for landed properties) from the date of the SPA. If the developer misses this deadline, they must pay Liquidated Ascertained Damages (LAD) to the buyer — calculated at 10% per annum on the purchase price for each day of delay. Upon VP, the developer issues a Notice of Vacant Possession and the buyer (or their representative) conducts a defect inspection. This inspection is crucial — it establishes the baseline for the Defect Liability Period. The buyer then has 14 days to pay any outstanding balance and collect the keys. Maintenance fees typically commence from the VP date, regardless of whether the buyer has collected the keys.
Investment Impact
VP date determines when your capital starts generating returns (through rental income or occupation). For off-plan purchases, delays in VP mean longer periods of loan servicing without rental income. Choose developers with strong track records of on-time delivery. LAD payments, while helpful, rarely compensate fully for the opportunity cost of delayed possession.