MALAYSIA Law and Practice Contributed by: Natalie Ooi and Nicholas Ooi, Ooi & Ooi
7. Construction 7.1 Common Structures Used to Price Construction Projects In Malaysia, construction projects are typically priced using several common contract struc - tures, depending on the nature of the project, client requirements and risk allocation. The most prevalent pricing structures include: • lump sum/fixed price contract; • measurement contracts (remeasurement/unit price contracts); • cost-plus contracts; • design and build contracts; and • turnkey contracts. 7.2 Assigning Responsibility for the Design and Construction of a Project Assigning responsibility for the design and con - struction of a project would depend on the type of contract used, which would then provide how those responsibilities are typically allocated. Traditional Procurement (Design–Bid–Build) The employer appoints consultants (eg, archi - tect, engineers) to design the project. After design completion, the project is tendered, and a contractor is selected to execute the works. The responsibilities are as follows: • the employer is the owner, who funds the project; • the consultants are fully responsible for the design; and • the contractor is responsible for construction only. Design and Build (D&B) The employer engages a single contractor to handle both design and construction.
• Public enquiry (Form E) – the Land Adminis - trator notifies interested parties and conducts an enquiry to assess compensation. • Compensation award (Form G) – after the enquiry, a written award detailing the com - pensation amount is prepared. The duration of this process can vary, depending on factors such as the complexity of the case and any objections raised. Affected parties, including lessees, are entitled to compensation aimed at restoring them to a posi - tion as if the acquisition had not occurred. The compensation is typically paid by the acquiring authority, usually the state authority or relevant government body overseeing the acquisition. Compensation considerations include: • market value; • severance damage; and • incidental expenses. 6.23 Remedies/Damages for Breach See 6.19 Right to Terminate a Lease and 6.21 Forced Eviction . There is no specific statute that capsthe amount ofdamages a landlord can claim after a tenant breaches a lease in Malaysia. Instead, it falls under the tenancy/lease agreement, the Spe - cific Relief Act 1950, the CA1950 and common law principles. Excessive penalty clauses may be deemed unenforceable under the CA1950. Nevertheless, a landlord would have a duty to mitigate and minimise its losses. A landlord typically holds security deposits by the tenant either in cash or via a bank guarantee.
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