Sure, all new launch properties come with a 24-month Defect Liability period (DLP) but homebuyers in Malaysia need to be educated about their rights when it comes to building quality. They have to be made aware that the issues they face are not without recourse and to demand quality for the huge sum of monies they are paying for their property.
How is it that Malaysians spend a hefty sum on a home that supposedly meets the necessary building requirements, only to find out that these assets are riddled with physical flaws, in this day and age? Cracked walls, leaking roofs and sinking floors – these are just a few of the gripes by purchasers.
Over the years, the National House Buyers Association (HBA) has recorded thousands of complaints from first-time homebuyers who were not satisfied with the condition of their new homes or the way defects were rectified during the DLP. The same complaints are constantly repeated by different owners across various housing schemes. Construction defects range from complex structural issues, which threaten the integrity of buildings, to simple items relating to aesthetics.
Issues faced during the Defect Liability Period (DLP)
The scenarios below showcase some of the plights of Malaysian homebuyers:
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 already paid in full and are still unable to occupy the house?”
Complaint Two: “The tiles in my apartment’s living room floor are not fixed properly. 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 property developer has not done anything to rectify them. Now, it’s been almost 12 months, and every time we call the developer 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!”
Sounds like a nightmare isn’t it? You would never assume to be in such a predicament when happily signing up for and purchasing a new-launch property. The new generation of first time home buyers in Malaysia 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 expectations, which has resulted in many disputes over the rectification of property defects. The developers, contractors and homebuyers all have different expectations.
What is the DLP anyway?
The pre-determined ‘Defect Liability Period’ in the sales and purchase agreement or 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 24 calendar months after the delivery of vacant possession. These 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-days’ notice, notify the developer of the cost of repairing and make good of said defects by giving the developer a further grace period of 30 days.
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What do to if you find defects in your new home?
Essentially, the following is what a buyer has to do if he finds defects in his new home:
STEP 1: List all defects in writing; take pictures of them, if possible. You can refer to our home inspection checklist to help you with this process.
STEP 2: Make sure the developer receives the defects list either by registered post, by electronic mails or by delivery by hand with acknowledgement of receipt.
STEP 3: 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.
STEP 4: 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 30-days grace period to do the rectification work, as stated in the DLP clause.
STEP 5: You 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 (5% of the purchase price as stated in the ‘Schedule of Payment’ in the SPA). You could adopt the ‘sample’ template that is on HBA’s website.
Sample letter to Developer’s lawyer on property defects claims
Appoint experts to conduct a home inspection
Although the law provides a 24-months 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 home inspection 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 the 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;
- Water leakage;
- Unevenness of flooring;
- Superficial repair work, etc
In addition, some home inspection experts 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, these inspectors are summoned to the tribunal as expert witnesses to challenge the developer’s rebuttals.
What else can homebuyers do if the developer is not responsive?
Besides the legal steps, aggrieved homebuyers should band together. Contact neighbours who have similar difficulties in getting their home defects rectified. You may have more in common than you think. There is power in numbers, and you can share tasks to lighten the workload. The main objective is to convince the property developer that you are serious about getting the defects rectified properly.
The affected buyers can collectively lodge a complaint with the Enforcement Division of the National Housing Department, Ministry of Housing and Local Government, with the view that it will intervene and subsequently convene a meeting with all the parties concerned. Details of said Enforcement Division is as follows:
Pengarah, Bahagian Penguatkuasaan,
Jabatan Perumahan Negara (JPN),
Kementerian Perumahan dan Kerajaan Tempatan,
No. 51, Persiaran Perdana,
Presint 4, Pusat Pentadbiran Kerajaan Persekutuan,
Remember that the quality of construction work in your neighbourhood will affect the property’s resale value and possibly your family’s safety.
If facing a dispute, file a claim at the Tribunal for Home Buyer Claims
Homebuyers who are caught in a dispute with their housing developers over non-remedial 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 Sec. 16N of the Housing Development (Control & Licensing) Act 1966. Check out the link to the Housing and Local Government Ministry for the Tribunal or Tribunal Tuntutan Pembeli Rumah here.
Look out for developers who adopt Quality Assessment System in Construction (QLASSIC)
Quality Assessment System in Construction or QLASSIC is a system to measure and evaluate the workmanship quality of a building’s construction work based on the Construction Industry Standard (CIS 7:2006). Only a handful of housing developers have adopted and subjected their products to the strict QLASSIC standards of construction. The first Quality Centre in Malaysia is by SKYWORLD – the SkyWorld Quality Centre is situated in Setapak, Kuala Lumpur. The property developer has embraced this practice by adopting QLASSIC as a selling point, as construction quality and building materials used are the main concerns amongst property buyers – most buyers have no choice other than to remain optimistic and hope that the workmanship and material used to construct their properties will be of acceptable quality. QLASSIC adoption will also reduce or eliminate reconstruction and repair works during the DLP.
In this regard, we must recognize that quality, safety and professionalism are primary prerequisites towards transforming the Malaysian construction industry into a responsible and developed industry instead of constantly being plagued with shoddy workmanship and sub-standard materials. But alas, these construction standards are currently merely on a voluntary basis and have not been made mandatory among all property developers in Malaysia, as yet. Malaysians who are looking to purchase new launch properties should include construction standards as an item on their checklist when performing due diligence during the property search and selection process.
Property Projects in Malaysia with QLASSIC accreditation
- SkyLuxe On The Park Residence – 85% QLASSIC score
- Ascenda Residences @ SkyArena – 76% QLASSIC score
- SkyAwani 2, Jalan Ipoh – 79% QLASSIC score
- De’Bunga Residensi garden homes @ Ukay Perdana
- The Light Collection III, Penang – >80% QLASSIC score
- Seri Riana Residence, Wangsa Maju – >80% QLASSIC score
- Saujana Duta in Seremban 2 – >80% QLASSIC score
- Elmina West (Double Storey Terrace Houses) – 83% QLASSIC score
- Bandar Bukit Raja (Double Storey Terrace Houses) 75% – 82% QLASSIC score
- Nilai Impian (Apartments) – 79% – 83% QLASSIC score
This article is written by Datuk Chang Kim Loong, Hon. Sec-Gen of the National House Buyers Association (HBA), a non-governmental, not-for-profit Organisation manned wholly by volunteers.
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