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Building Condition Survey: Why is it important for property owners?


Sufficient sinking funds is imperative for the management of strata buildings to conduct what is known as Building Condition Survey (BCS) to identify defects and carry out repairs over the lifespan of the building. The BCS is also an investment that allows strata property owners to anticipate maintenance needs and costs rather than simply reacting when something goes wrong.

© bestyy38| 123rf

Many condos and apartments in Malaysia are run down due to the management committee (JMB or MC) not collecting sufficient sinking funds for repairs. According to the Strata Management Act, a minimum 10% of sinking funds must be collected, but this is usually insufficient for most condos. Instead, a sinking fund of 20 to 30% is recommended.

Management of strata buildings must take building repairs seriously and conduct financial analysis and budgeting to ensure sufficient funds for maintaining their building’s safety and functionality. A good example would be Desa Damansara Condo which collects 30% sinking funds from its property owners. As a result, although the condo is 35 years old (Phase 1) and 17 years old (Phase 2) – it is very well maintained.

With enough funds, the management committee, with the help of a property manager/property management company, can conduct what is known as a Building Condition Survey (BCS) to identify defects over the lifespan of the building and carry out necessary preventative repairs.

How do Building Condition Surveys enable us to protect our interests as strata property owners as well as prevent damages to our finances and the safety of our homes?  Let’s take a look down below.

What is Building Condition Survey?

Basically, Building Condition Survey is a health check for buildings conducted by a registered property manager. For your information, The Board of Valuers, Appraisers and Estate Agents Malaysia (BOVAEA) has issued a Property Management Standard to require property managers in Malaysia to conduct BCS for buildings they are in charge of.

A BCS provides a detailed report to property owners regarding defects that go against the building’s specification in the Sales and Purchase Agreement (SPA) and other statutory requirements stated in building codes such as Uniform Building By-Law 1984 (UBBL) and Bomba Act 1988. 

Under BCS, a systematic inspection, review and report are carried out on the following building components:

  • Structural components such as walls, floor, roofs and fenestrations
  • Building services such as electrical and mechanical systems, lifts, plumbing, CCTVs, ventilation and air conditioning systems
  • Interior components such as tiles, paints, ceiling and other floor finishes
  • Exterior components including facades, fixtures and fittings

BCS is conducted as part of due diligence during a pre-acquisition inspection, life cycle management and budgeting in the planning for rehabilitation, defect management and periodic structural inspection imposed by the local authorities. 

Why is a Building Condition Survey important?

The table below shows the stages in which a Building Condition Survey should be carried out, the benefits of doing so and the consequences should it be sidelined:

StagesBenefits of Building Condition Survey Consequences of not conducting Building Condition Survey
Delivery of Vacant Possession • A condition survey report will provide detailed information on the building plan, list of defects and accompanying photos. This helps property owners to identify defects better, which can then be repaired during the DLP.
• Protection of property buyers against developer’s negligence or legal violations
• Financial loss
• Compromised functionality and fitness means building residents are unable to live in peace
Defect management during Defect Liability Period (DLP)• Reporting of defects that occur during DLP • Monitoring of repair works • Poor workmanship
• Financial loss
• Inhabitable property
• Compromised functionality
Handing over of management from JMB to MC • Life cycle management and budgeting
• Preservation of property value and reputation
• Deferred maintenance and deterioration lead to loss of property value
• Building residents are unable to live in peace

Who are the key stakeholders in a Building Condition Survey?

The stakeholders in a Building Condition Survey depend on the management period, as shown in the table below:

Management PeriodDeveloperJoint Management Body (JMB)Management Corporation (MC)
StakeholdersProperty development companyJoint Management Committee members, property development company representatives, strata property owners and property managerManagement Committees members, strata property owners and property manager

What are the responsibilities of a property manager?

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According to Standard 3 in the Malaysian Property Management Standards, a property manager shall prepare a clearly defined checklist to ensure a successful handing over of assets, documents and records with regards to the maintenance and management of the property during a handover of property management. 

Upon taking over the property, the property manager shall carry out a Building Condition Report – a general inspection audit of the state of repair and condition of the buildings, infrastructures, installation and facilities, the required repairs and anything lacking in the upkeep of the property.

During handover, the property manager should provide an updated Building Condition Report to the client(JMB or MC) in order to ensure a smooth transition to the next property manager. Read more on property managers here: Property management company: The roles and advantages of hiring one

How is the Building Condition Survey carried out?

Prior to carrying out a BCS, the property manager will prepare a checklist and defect sheets to conduct a visual inspection to assess the condition and identify building maintenance priorities. To prepare said checklist, the property manager has to conduct a preliminary review to gain some background understanding of the status of the strata building:  

  • Review the history of the building maintenance; 
  • Review statutory orders issued by government departments to understand relevant statutory requirements;
  • Compare occupation permits, floor plans and other documentation against the existing layout of the building;
  • Review provisions pertaining to maintenance of the building;
  • If necessary, conduct a survey among residents on the overall workmanship, comfort, functionality and performance of the building.

If inventory records of all assets and service log books are available, the property manager will review them to develop checklists for the inspection of different building components. But should these documents not be available, the property manager will refer to operations and maintenance manuals and relevant drawings to draft his checklists.

The condition of the building will be rated based on the Building Assessment Rating System (BARIS) or Building Condition Assessment Rating System (BCARS). Building Condition Reports typically contain details such as the address, type of building, type of land (leasehold or freehold), date of Vacant Possession and the developer’s name.

Meanwhile, the Defects Sheet will include details such as building name, floor, room name and building component. Each defect sheet will cover one defect, with a BARIS scoring and matrix rating indicated by different colours. A defect sheet also describes the defect, possible causes and proposed remedial actions.

A typical Defect Sheet based on BARIS Rating. © Perakhouse Blogspot

How frequent should a strata building be inspected?

Keeping a building safe and functional requires routine inspection and updating of the Building Condition Report. The frequency of inspection may differ from one building component to another, depending on its typical service lifespan and servicing needs. The table below contains the recommended frequency of monitoring for different building components, from the Building Maintenance Guidebook published by the Building Department of Hong Kong:

Recommended frequency of monitoring for different building components. Source: Building Maintenance Guidebook, Building Department Hong Kong

When should JMB or MC hire an independent expert?

If you suspect there is building dilapidation or failure beyond the technical know-how of your property manager, Standard 3 of the Malaysian Property Management stipulates the manager shall recommend that the client (JMB or MC) appoint an independent expert to carry out specialised testing and investigation, the cost of which shall be borne by the client. 

What are the signs that you need to engage an independent expert?

  • Cracks indicate structural deformation and failure. According to BS 8110 Structural Use of Concrete, any crack 0.3mm or bigger on structural elements are considered a structural crack that requires assessment by a structural engineer.
  • Being the main load-bearing elements, pillars are fundamental to structural safety. Thus, any cracks and dampness on pillars must be treated with utmost urgency. Of the many types of cracks, splitting cracks are the most critical ones with a high risk of collapse. 
  • Cracks on concrete beams are also common. Due to the high level of humidity in Malaysia, dampness in structural elements causes widespread deterioration induced by corrosion. Besides, shear cracks which extend diagonally at the edges of the beam (inclined at 45 degrees with the horizontal) are dangerous cracks, too.
© Hye Young Hwang
  • Slope condition and drainage system also must be inspected regularly. An excessive amount of water that seeps into the soil near a slope and drainage system can trigger soil erosion, differential settlement, subsidence and emergence of potholes. Additionally, excessive water in damp soil can also destabilise the foundation and soil mechanics.

READ: Building quality: The way forward for Malaysia’s construction industry

Suppose you suspect there is structural deformation or deterioration. In that case, S85A of the Street, Drainage and Building Act 1974 says you can trigger a Periodic Structural Inspection by writing to the Building Control Division of the Local Government for an earlier structural inspection. A professional structural engineer registered with the Board of Engineers shall carry out a visual inspection of the structure.

If the engineer discovers a deformation that requires further testing, he/she will recommend so in his report to the local government. Upon approval by the local government, further testing shall be conducted at additional costs to the client. The result of this test will be reviewed by the local government for further action.

Recommendations for JMB and MC

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The spirit and objective of Building Condition Surveys are to ensure building safety and functionality, as well as the realisation of the designated building economy life of 60 years. It is a deliberate monitoring exercise for a regular update on the building’s condition. Life Cycle Management in planned replacement and refurbishment of expired building components can also reduce secondary damage to other building components.

Dampness and the resulting biological contamination can have an adverse effect, not only on the health of the residents but also on the health of the concrete if you keep deferring maintenance. Read more on Mould and indoor air quality in your house.

Routine monitoring and inspection, timely repair, refurbishment and replacement must be supported by sufficient financing from sinking funds. Taking into account inflationary pressures, you will need long-term budgeting to ensure sufficient funds to handle the task of building rehabilitation and maintain the property value, optimise safety and safeguard the return on investment of stakeholders. 

Based on the experiences of other Commonwealth countries such as the UK and Australia, a vast majority of apartments and condominiums do not have sufficient sinking funds for such capital expenditure when their buildings age and become dilapidated. 

This article was jointly written by Kuan You Wai, a Specialist Building Inspector and a speaker for the Malaysia Institute of Property and Facility Managers as well as Teo Khiok Nyuk, a registered Property Manager with BOVEAP.

Disclaimer: The information is provided for general information only. Malaysia Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

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