By Datuk Chang Kim Loong
Home buyers in Malaysia need to be educated about their rights and the right to demand quality for the big sum they pay for their property. To illustrate this point are two common scenarios:
Complaint 1: “After receiving the keys to our home, we were dismayed to discover the property had many defects ranging from minor issues 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. How can I have the process for rectification expedited as we have paid in full and are still unable to occupy the house?”
Complaint 2: “The floor tiles in my apartment living room are not properly fixed. When walking on them, they give a 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. The developer has yet to rectify the problem after almost 12 months; 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 bearing the cost of workmanship only!”
These two complaints are among thousands recorded by the National House Buyers Association (HBA) over the years from buyers who were not satisfied with the condition of their new homes or the way defects were rectified.
Such complaints are repeated by different owners in other housing schemes. The defects range from complex structural issues, which threaten the integrity of buildings, to simple items relating to aesthetics.
Although the build quality of houses has improved over the past decade, it has not kept pace with buyers' expectations in design and finishing. This has resulted in disputes among developers, contractors and home buyers over the rectification of defects.
Defect liability period
The pre-determined Defect Liability Period in the sale and purchase agreement (SPA) states that the developer is required to repair, at its own cost and expenses, any defects, shrinkage or other faults that become apparent within 24 months after the delivery of vacant possession and which can be attributed to defective workmanship, materials or a failure to construct the property according to the plan in the SPA.
Repairs are to be done within 30 days of receiving written notice from the buyer. The SPA also states that the purchaser shall, at any time after the expiry of the 30-day notice, inform the developer of the cost of repairs and give a further grace period of 30 days.
Essentially, here’s what a buyer has to do:
- List all defects in writing; take pictures of them, if possible.
- Make sure the developer receives the defects list either by registered post, e-mail or delivery by hand with acknowledgement of receipt.
If the developer is responsive, he will begin work in 30 days. 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 contractors to do their work.
If the developer is unresponsive, get a detailed quotation from a reputable independent contractor for the repair cost. Give the developer a second notice and the stipulated 30-day grace period to do the work.
The buyer may recover the repair cost from the developer's lawyer after giving written notification to hold back the stakeholder sum (5% of the purchase price) as stated in the ‘Schedule of Payment’ in the SPA. (Sample template in HBA website @ www.hba.org.my)
Appoint a building inspector
Although buyers have up to 24 months to refer defects to developers, most of them don't have the expertise to suss out inconspicuous defects. By hiring a building inspector, owners will be able to identify problems early and get them rectified before they worsen. These inspectors are trained to identify faults disguised by cosmetic improvements, which may be missed by the layman.
Most architects and surveyors double up as building inspectors in Malaysia. An inspector’s fees range from RM500 to RM3,000. After examining a property, the inspector submits a report that includes recommendations for follow-up action. The report is then submitted to the tribunal for home buyer claims when an aggrieved buyer makes a claim for monetary compensation. Building inspectors are often summoned to the tribunal as expert witnesses.
What next?
Buyers should band together. Contact neighbours who face similar difficulties in rectifying defects. There is power in numbers. Buyers can collectively lodge a complaint with the Enforcement Division of the National Housing Department, Ministry of Housing and Local Government, with a view that it will intervene and convene a meeting with all parties concerned. 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
House buyers who are caught in a dispute with their developers can turn to the tribunal for home buyer claims. The tribunal was set up as an alternative forum for purchasers instead of fighting with developers in civil court. The filing fee is only RM10; no lawyer is required and hearings are normally fixed within a month.
The tribunal is empowered to hear disputes between buyers and developers but the claims must be filed within the time frames under Sec 16N of the Housing Development (Control & Licensing) Act 1966.
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