A dream home can turn into an absolute nightmare if due diligence is not practiced
BY Roznah Abdul Jabbar
So, you have gone through the whole process of purchasing your dream home and finally you received the keys. To your dismay, you discovered several defects in the property. Do you know what you should do?
Property defects in new properties are, unfortunately, quite common in this country. The House Buyers Association (HBA) has been receiving thousands of complaints from buyers who are not satisfied with the condition of their new homes and the way defects are rectified.
The association said construction defects range from very complex structural issues, which threaten the integrity of buildings, to simple items relating to aesthetics. Often, there are several defects.
Home owners want developers to do the rectification works, but many are not aware of how to make them.
Under the Housing Development (Licensing and Control) Act 1966, developers are required to repair and make good the defects at its own cost and expense within a period of 18 months after delivery of vacant possession. These include defective workmanship, materials or failure to construct the property in accordance with the plan and description appended in the sale and purchase agreement (SPA) within 30 days of having received written notice from the purchaser.
The SPA only provides for minor defects which are to be rectified under the defects liability period as required and directed by the architect of the developer.
To ensure that the developer carries out its statutory obligation, there are retention sums carved out from part of the purchase price which is held by a stakeholder so that the developer performs its obligation under the terms of the SPA.
If the developer fails to make good the defects within the stipulated time-frame to the satisfaction of the architect, the sum retained can be used to remedy or make good the defects.
There are, however, no provisions which address the possible scenario of major defects, such as a property unfit for human habitation due to deviation from approved plans and statutory licences and approvals from the local authority, and non-compliance with relevant laws on electricity supply installations and such.
What should you do?
List out all the defects in writing as soon as possible and mark all the defect areas with a masking tape and marker pen. Take pictures of them if possible.
After that, make sure the developer receives the defects list either by registered post or acknowledgement of receipt.
If the developer is responsive:
- i) The developer has 30 days from the date of receipt to do the rectification works.
- ii) Go through the list of defects with the developer, for a discussion on the rectification work schedule.
iii) Be prepared to spend time or appoint someone to be around for the appointed contractors to do their work.
If the developer is unresponsive:
- i) Get a quotation from a reputable independent contractor for the cost of repair and making good the defects.
- ii) Give the developer a second notice and a stipulated 14-day grace period to do the rectification work.
iii) Recover the cost (any sum) of the repair from the developer’s stakeholder lawyer after having given written notification to require the stakeholder to withhold release of the stakeholder sum.
In the event the developer fails to carry out the repairs or certify them as remedied and attended to by the developer, the buyer is entitled to carry out the repair of defects and claim for the retention sum from the stakeholder. Any breach by the stakeholders in the release of the stakeholder sum to any party is a serious criminal offence.
Besides legal steps, buyers should also band together. Contact neighbours who have similar difficulties in getting defects rectified. You may have more in common than you think. There is power in numbers, and you can share tasks to lighten the load. The main objective is to convince the developer that you are serious in getting the defects rectified properly.
Remember that the quality of construction in your neighbourhood will affect your resale value and possibly your safety.