Higher amount to be accounted for / taken into consideration for a restructuring exercise (of a developer company).
A landmark decision by the Federal Court: When you buy a house and the developer is late in delivering the house to you, the “late charges” (LAD) shall be calculated from the date of booking fees paid, not from the date of sale and purchase agreement”.
Thus, if you are looking into investing/purchasing a development company (becoming the White Knight), the LAD/potential LAD is one of the items you would want to take note of and possibly to conduct a due diligence on it, prior to entering/sealing the deal.
If you are a developer company and is considering a debts restructuring, the LAD claims is also an area to focus on. With the recent Federal Court decision, the impact of the LAD may be huge and the company would have to relook into the total potential LAD claims and amend their restructuring proposal accordingly.
Read more about the news here.
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