How to Resolve Defects in a Strata Development during Property Handover?

Checklist while handing over to MC in Singapore

Singapore is a young country with a history of fewer than 50 years, but already have a world class environment built to provide a superior standard of living. There are strata developments worth millions or even billions of dollars. A Strata development needs an efficient and methodical approach to management from the very beginning for its smooth functioning. There comes a time for every strata development when the builder has to hand over control of the building to its Management Committee(MC). To start off the strata development management on the right note, it is best to observe systematic and effectual practices during this entire process.

Process Flow

Every building is bound to have defects. If the council is not tolerant of such defects, the MC may make a claim against the developer. The figure below shows the ideal process flow to resolve defects in a strata development.

1. Collect Documents

Documents that are required for defects claim are:

i)     MCST Document

  • Aa as-built plans and warranties
  • MCST Resolutions and minutes of meetings
  • Strata roll
  • Developer’s marketing brochures

ii) Financial Document

Current and past reserve studies (from the time the maintenance fund account has been established)

iii) Reports

  • Submissions by developers to authorities, including subdivision reports
  • Engineering reports on soils, mechanical and civil structure
  • Reports and photographs from developer and consultants relating to defects

iii) Correspondence

When it comes to making claims against a developer, we need to understand that we not only need a lawyer in fighting for the cause of the MC. On top of the defects that are apparent in the structure of the building, the lawyer requires correspondences that relate to the defects and these correspondences must be as comprehensive as possible.

2. Assemble the Expert Team

Prior to engaging a lawyer, it is not uncommon for the MC to first appoint a building surveyor to conduct a visual inspection of the strata development. Depending on the complexity of the case, tests may be conducted for the report to be produced. With the initial inspection report, the MC may then appoint a lawyer to study the implications of the defects reported. At this point, the defects list, Compiled by MA or strata manager, will prove to be very helpful in assisting the building surveyor to build the case.

It is better to make a report which contains a detailed description of what is expected of a building surveyor. Ideally, the report should contain:

  1. Defects and their location
  2. Reasons for the defects
  3. Identification of the party/parties responsible for the defects;
  4. Repair recommendation
  5. An estimated cost of rectification.

3. Ascertain the Financial Limitations

It is necessary for the MC to first determine its financial ability because legal claims for defects can be costly. The cost of rectifying defects can be obtained from estimation provided by a qualified quantity surveyor or with proper quotations, proper work specifications, statements of rectification etc.

4. Get a Mandate

When it comes to claiming against construction defects, time is the essence. MA or strata manager cannot have a full six years limitation period to act against a developer. Many are unaware of the fact that a developer can apply voluntarily wind up its own company anytime after it has completed its final reports and cleared its liabilities. There are also chances for the developer to be bankrupt, or out of business. To avoid all these, It is best to suggest to the council to obtain a mandate to act as early as the second annual general meeting(AGM). Once all the information has been obtained and the council has received the mandate to act, it is up to the council’s discretion to decide whether it would eventually embark the litigation. 

 

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About the Author: Paul Maliakel

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