Buying a new home is an exciting milestone, but it can quickly turn into a nightmare if you encounter defects in your property. From structural issues to faulty appliances, discovering defects in your new home can be stressful and costly.
That's where having a good understanding of your rights as a home buyer becomes crucial.
For home buyers, understanding the process for addressing property defects is crucial. The Statutory Sale and Purchase Agreement ('SPA') under the Housing Development (Control and Licensing) Act 1966 ('HDA') outlines the steps and rights involved in making defect claims. Here’s a detailed guide to help you navigate this process effectively.
Defect Liability Period
Clause 30 stipulates that the developer must rectify any defects within the defect liability period, which lasts 24 months from the date of vacant possession ('VP'). During this period, you have the right to request the developer to address any issues with the property.
Steps for Making Defect Claims
Identify Defects:
Upon taking VP, inspect the property thoroughly and document any defects. Ideally, consult a defect inspector. Serve Written Notice:
Send a written notice to the developer detailing the defects. The developer is obligated to address these issues within 30 days of receiving your notice. Follow-Up Action:
If the developer fails to make good the defects within the initial 30-day period, you can take further steps.
Issue a second written notice to the developer, including a quotation from your contractor for the necessary repair work.
Provide the developer with an additional 30 days to rectify the defects. Commence Repairs:
If the developer still does not address the defects, your contractor can proceed with the repairs.
Notify the stakeholder lawyers named under clause 30(4) of the intention to claim the stakeholder sum under item 5 of the 3rd schedule of the Sale and Purchase Agreement.
You can claim the cost of these repairs from the developer, based on the provided quotation.
The Total Of 5% Held By The Stakeholder Lawyer
The stakeholder solicitor named under clause 30(4) must withhold the initial 2.5% payment until 8 months after the home buyer takes vacant possession.
The remaining 2.5% will be released only after 24 months from the date of vacant possession (Defect Liability Period / DLP).
Home Buyer's Rights
It’s important to note that even if the defect liability period has expired, you retain the right to sue the developer for defects based on common law.
The Court of Appeal decision in Chrishanthini Angela Regina a/p Sebastiampillai v View Esteem Sdn Bhd [2022] MLJU 2304 reaffirms this position. The court stated:
“[28] A careful consideration of cl 29 SPA would show that it is not intended to bar a purchaser from asserting the common law rights to claim for damages under the SPA. The legal framework of cl 29 is such that it is a but a mechanism for the purchaser to ensure that defects which shall become apparent within 24 months after VP are rectified. This is provided the 30 days’ notice is received.”
This decision highlights that Clause 30 is designed to ensure defects are addressed promptly but does not eliminate your right to seek damages for defects through common law avenues.
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