Buyers' rights in building defect disputes

Knowing a buyers' rights is crucial, while recourse is available for homeowners following the purchase of a new home or a renovation stint, this is not to say that any and all defects can be claimed against the developer and/or renovation contractor.

Being able to differentiate between what is contractually binding and what is mere marketing speak is of great importance.

"Marketing speak should generally not be trusted or relied on to impose any legal obligations on the developer. The developer's legal obligations to the purchasers are contained in the sale-and-purchase agreement," said Rodyk & Davidson partner Ling Tien Wah.


Even so, marketing agents must not say anything to mislead or misrepresent, or make empty promises, otherwise the purchasers may potentially have a cause of action for misrepresentation or breach of contract, he added.

The sale-and-purchase agreement - which exists to govern the sale of uncompleted private residential properties - provides for a one-year defects liability period during which the developer is required to rectify, at his own cost, any defects in the units.

Such defects must be made good by the developer within one month of having received a written notice from the homeowner.

Failing this, the buyer can send a notice of intent, stating the homeowner's intent to carry out the rectification work and estimated costs to the developer.

The purchaser may then proceed to rectify the defects by engaging his own workmen and recover the cost from the developer. Such costs can be deducted from the sum held by the Singapore Academy of Law.

In the event that latent defects are observed beyond the one-year defects liability period, purchasers can still take civil action against the developer, said a spokesman from the Urban Redevelopment Authority (URA). "Beyond the one-year defects liability period, purchasers can still take civil action against the developer for latent defects due to negligence or breach of contract, within six years from the date that the damage arose, or three years from the date that the damage was discovered, whichever is later."

However, developers should first be given an opportunity to rectify any genuine building defect, whether patent or latent, that the purchasers claim the developers are liable for.

Specifically, consumers should write in to the developer instead of contacting them over the phone.

Said Rodyk's Mr Ling: "If this fails to resolve matters, then the parties should still try their best to resolve the issue amicably and also consider referring the dispute for mediation to try and reach an amicable settlement in the matter. Taking civil action against developers for defects (whether patent or latent) should be the option of last resort.

"Purchasers should seek legal advice as to whether or not their claim against the developers for latent defects is already time-barred. If the claim is not time-barred, and the matter cannot be resolved amicably, then the purchasers have the option of instructing their lawyers to commence a civil suit against the developers for the latent defects if the purchasers wish to go down that route."

In the same vein, the Consumers Association of Singapore (Case) has a model renovation contract available on its website that consumers can download to help consumers make more informed decisions.

"The renovation contractor is bound by the contract signed with the consumer. As such, the contractors have to fulfil the contract terms to provide satisfactory service to the consumers," said Seah Cheng Choon, executive director of Case.

Case asked consumers to keep in mind that renovation contractors have their field of speciality - that is, those who are good at HDB renovation may not be so for other properties and vice versa.

"In this regard, consumers must be mindful that their contractors must have enough expertise to guide them through the slew of permits required in a renovation job," it said.

To ensure this, consumers should check the credentials of their renovation contractors and ask for a list of works done. For HDB dwellers, it is important to engage an HDB-approved contractor.

"During works-in- progress, it is essential to monitor the works as sometimes inferior products can be 'buried' by contractors within their works. (If the defects are spotted) beyond the defect liability period, proof will be difficult," Case said. Indeed, unsatisfactory work and pricing are two common gripes reported to Case, which counts complaints against renovation contractors among the top three disputes it received.

The number of disputes received by Case has been on the uptrend, jumping from 946 in 2009 to 1,313 in 2010. Case's data shows that complaints rose further, to 1,532 last year, from 1,488 in 2011.

"A possible reason could be the increase in real estate transactions in recent years," said Mr Seah. "As more people are buying properties, there is increasing need for contractor services."

Source: Business Times –29 January 2013