New community – purchase from housing developers

House buyers in Malaysia need to be educated about their rights. They have to be made aware of the issues they face, and to demand quality for the huge sum of money they are paying for their property.

Complaint One

“I received the keys to our home and to our dismay, the property had many defects, ranging from minor problems to major misalignment of the walls and beams. The developer is rectifying the minor defects but is not willing to align’ the walls or beams that have been placed improperly. How can I have the process for rectification expedited as we have paid in full and are still unable to occupy the house?”

Complaint Two

“The floor tiles in my apartment’s living room are not properly fixed. When one walks over them, they give a certain hollow sound. There are at least 30 floor tiles with this problem. Also, the edges of the walls where the tiles meet were not properly done. I submitted a complaint form, but the developer has not done anything to rectify them. Now, it’s been almost 12 months, and every time we call to ask about the repair work, they tell us they could not find the right colour tiles. We are told that the only alternative is for us to change all the tiles with the developer only bearing the cost of workmanship!”

OVER the years, the National House Buyers Association (HBA) has recorded thousands of complaints from house buyers who were not satisfied with the condition of their new homes or the way defects were rectified.

The complaints above are just two of them. Construction defects range from complex structural issues, which threaten the integrity of buildings, to simple items relating to aesthetics. After receiving the keys to their houses, the smile on the buyers’ face soon fade when they are caught in a situation of getting the multiple defects in their homes rectified satisfactorily.

The new generation of house buyers expects their homes to be defect-free. The quality of houses, which although has improved over the past decade, has not kept pace with buyers’ expectations in both design and finishes. There is also a lack of industry quality standards that are compatible with public interest and expectations which has resulted in many disputes over the rectification of defects as developers, contractors and house buyers have different expectations.

Defect Liability Clause

The pre-determined “Defect Liability Clause” in the sale and purchase agreement (SPA) states that the developer is required to repair and make good, at its own cost and expenses, any defects, shrinkage or other faults that become apparent within a period of 18 or 24 calendar months (whichever is applicable) after the delivery of vacant possession and which can be attributed to defective workmanship, materials or a failure to construct the property in accordance with the plan and description appended to the SPA within 30 days of having received written notice from the purchaser.

The second part of the clause states that the purchaser shall, at any time after the expiry of the 30-day notice, notify the developer of the cost of repairing and make good of the said defects by giving the developer a grace period of 14 days.

Essentially, the following is what a buyer has to do if he finds defects in his new home:

  • a) List all defects in writing; take pictures of them, if possible.
  • b) Make sure the developer receives the defects list either by registered post or by delivery by hand with acknowledgement of receipt.

If the developer is responsive, he will do rectification work 30 days from the date of receipt. The buyer should go through the list of defects with the developer to discuss the rectification work schedule. He must also be prepared to spend time or appoint someone to be around for the appointed contractors to do their work.

If the developer is unresponsive, get a detailed quotation from a reputable independent contractor for the cost of repairing and making good the defects. Give the developer a second notice and the stipulated 14-day grace period to do the rectification work. The buyer may recover the cost (any sum) of the repair from the developer’s stakeholder lawyer after giving written notification to withhold release of the stakeholder sum the 5% of the purchase price as stated in the SPA.

Appoint a building inspector, where necessary

Although the law provides a 18- or 24-month warranty (whichever is applicable) for owners to refer defects to the developers, buyers do not know what to look out for as they don’t have the expertise to suss out or foresee inconspicuous defects.

Many are unaware that getting building inspectors to inspect their homes can save them a lot of heartache at the end of the day. By getting these professionals to conduct defect checks, owners will be able to identify problems early and get them rectified before they escalate. They have the trained eye to identify faults disguised by cosmetic improvements, which may be missed by the laymen. Most architects and surveyors double up as building inspectors in Malaysia.

The inspectors, whose fees range from RM500 to RM3,000, will examine a property and submit a report, which includes recommendations for follow-up action. The awareness of the availability of such a service in the country is still low.

Typically, a thorough inspection should pinpoint:

  • > Structural cracking or deformities on walls, roofs and floors;
  • > Dampness leading to rotting or unsound structure;
  • > Damage to timber caused by fungal decay, wood borers, termites or by industrial chemicals;
  • > Defective plumbing and drainage systems; and
  • > Superficial repair work.

In addition, some building inspector may even estimate the cost of remedying defects found. Most of the time, their reports are submitted to the Tribunal for Home Buyer Claims when an aggrieved buyer makes a claim for monetary compensation and technical claims. Very often, building inspectors are summoned to the tribunal as an expert witness to challenge developer’s rebuttals.

What next?

Besides the legal steps, buyers should 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.

The affected buyers can collectively lodge a complaint with the Enforcement Division of the National Housing Department, Urban Wellbeing, Housing and Local Government Ministry, with the view that it will intervene and subsequently convene a meeting with all the parties concerned. Details of the said Enforcement Division is as follows:

PengarahBahagian PenguatkuasaanJabatan Perumahan NegaraKementerian Perumahan dan Kerajaan TempatanAras 30, No. 51, Persiaran PerdanaPresint 4, Pusat Pentadbiran Kerajaan Persekutuan62100 PutrajayaTel No: 603-8891 4410

email: enforcement@kpkt.gov.my Remember that the quality of construction work in your neighbourhood will affect the property’s resale value and possibly your safety. Filing a claim at the Tribunal for Home Buyer Claims

House buyers who are caught in a dispute with their housing developers over non-remedial of defects, shrinkage, defective workmanship or materials or other technical faults are at liberty to file their claims at the Tribunal for Home Buyer Claims (The Housing Tribunal).

The Housing Tribunal was set up as an alternative forum for house buyers to save them the cost and hassle of fighting with housing developers in the civil court. The filing fee is only RM10, no lawyer is required and hearings are normally fixed within a month.

The Housing Tribunal is empowered to hear disputes between house buyers and licensed housing developers but the claims must be filed within the time frames provided under section 16N of the Housing Development (Control & Licensing) Act 1966 (the HDA). Check out the link to the Urban Wellbeing, Housing and Local Government Ministry vis-vis Tribunal at:

http://www.kpkt.gov.my/kpkt_bi_2013/index.php/pages/view/370

Chang Kim Loong is the honorary secretary-general of the HBA (www.hba.org.my), a non-profit, non-governmental organisation (NGO) manned by volunteers. He is also an NGO councillor at the Subang Jaya Municipal Council.

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