Common Defects and Remedies when Purchasing a Property from a Developer

As with all things new, there is a keen desire to ensure that no defects are present. However, this is sometimes not so and when it occurs, many are unsure what can be done to get such defects rectified.

The information here is aimed at first-time private-home buyers. It advises them on the possible ways to settle disputes relating to defects when purchasing a property from a developer. The roles and areas of responsibility of the various government agencies are also briefly described, together with those of utility suppliers. 

1. How do I know whether an item is defective?
2. How to deal with a defect in my new home?
3. What should I do when there are defects in my new home?
4. What if there is no response from developer?
5. Resolving disputes

How do I know whether an item is defective?

Various types of unacceptable defects
•   Basic Mechanical & Electrical
•   Ceiling
•   Components
•   Doors
•   Floors
•   Internal Walls
•   Windows 

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How to deal with a defect in my new home?

Getting the keys to a new home is an exciting time, filled with great anticipation. Though we always expect our dream homes to turn out perfect, sometimes this is not the case. We find that certain items of work are not in accordance with the specifications, or detect instances of shoddy workmanship. What can we do about it? Under the Sale & Purchase Agreement signed with your developer, your developer has certain obligations to fulfill when defects are detected within the Defects Liability Period (usually 12 months). You too, have a part to play in ensuring that the defect rectification process proceeds smoothly. The key steps in the defect rectification process in Clause 17 of the Sale and Purchase Agreement on Developer’s Obligations are listed here.
1. Within a period of twelve (12) months from the date of Notice of Vacant Possession, also known as the Defects Liability Period (DLP), the developer is responsible for any defect that occurs in the unit, the housing project and the common property.
2. Any such defects due to defective workmanship or materials, or to the unit, the housing project or the common property not having been constructed in accordance with the specifications in the Sale and Purchase Agreement, shall be made good by the developer.
3. Such defects must be made good by the developer at his own cost and expense within 1 month of having received a written notice from the homeowner.
4. If the defects are not made good, the purchaser may notify, by sending a Notice of Intent to the developer, of his own intention to carry out the rectification work, furnishing its estimated cost and giving the developer another opportunity to carry out the rectification within 14 days from the date of the Notice of Intent.
5. If the developer fails to rectify the defects after the specified time in the Notice of Intent, the purchaser may proceed to rectify the defects by engaging his own workmen and recover the cost from the developer. Such costs may be deducted from the sum held by the Singapore Academy of Law as stakeholder for the developer.

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What should I do when there are defects in my new home?

You may follow the steps below, which are based on the terms in the Sales and Purchase agreement:-
1. Give advance written notice to the developer highlighting specific details of the defect(s). If no response is received by one month from the date of notice, proceed to Steps 2a and 3a. (The notice can be in various forms e.g. developer-issued inspection form for reporting defects, letters, etc)
2. Make arrangements with the developer to either conduct a joint inspection of the defect, or fix an appointment for the developer to carry out necessary repairs if the inspection is not necessary. (Please note that to agree on a suitable time for repairs to be carried out, coordination by both parties is required.)
3. After an appointment has been fixed, contribute by helping to ensure that the area for repair has been cleared, to facilitate the smooth completion of work (This will help prevent damage to your furnishings and belongings while repairs are being carried out).
4. At the appointed day and time, make sure that someone is in the premises to grant access to the workmen to carry out rectification works.
5. Acknowledge to confirm that repairs have been carried out. (This will help all parties to account for the status of the work and prevent any complications that may arise. Additional defects may be dealt with in the same manner as described above).

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What if there is no response from developer?

1. Issue written notice to the developer of your intention (Notice of Intent) to rectify the defects and also provide the estimated cost of such work.
2. You may commence your own rectification works if the developer does not carry out the work within 14 days from the date of notice, and recover the cost from the developer. The cost may be deducted from the sum held by the Singapore Academy of Law as stakeholder for the developer.

Flowchart illustrating the steps to getting defects rectified

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Resolving disputes

There may be instances where the developer disputes your rectification request, or there may be unresolved issues such as disagreements on defects, repairs that are not carried out satisfactorily, or lack of response to your concerns.

You should first consider resolving your disputes through mediation. In mediation, an impartial third party, called a mediator, will help you and your developer to negotiate an amicable settlement of your differences. The mediator does not decide on the dispute, but will help you and your developer reach a mutual agreement that is in the interest of both parties. Mediation is less time consuming and costly than litigation or arbitration.

If you and your developer are unable to settle your disputes through mediation, you may consider other dispute resolution measures such as neutral evaluation, arbitration or litigation.

If mediation services are required, there are a number of organizations/bodies that provide such services.  Three organizations/bodies are highlighted here.  A fee may be charged for these services.  You are advised to check with the respective organizations/bodies to confirm the fees before engagement.

Singapore Mediation Centre (SMC)

The SMC is a non-profit organization funded by the Government through the Ministry of Law, and guaranteed by the Singapore Academy of Law. It provides mediation and neutral evaluation services.

The mediation process is facilitated by mediators appointed by the SMC. The mediators include former Supreme Court judges and judicial commissioners, senior lawyers, and senior and respected construction industry professionals, such as architects, engineers, project managers, quantity surveyors and builders. The SMC will match appropriate mediators to disputes. In addition, you and your developer will each pay an administrative fee. In neutral evaluation, you and your developer will select an evaluator from the SMC’s panel of evaluators to provide an impartial written opinion on the merits of the disputes between you and your developer. The SMC’s evaluators also include senior and respected construction industry professionals such as architects, engineers, project managers, quantity surveyors and builders.
SMC website : www.mediation.com.sg

Real Estate Developers’ Association of Singapore (REDAS)

The REDAS Conciliation Panel helps to resolve disputes concerning workmanship, quality of materials used and unmet obligations under the Sale & Purchase agreement. The Conciliation Panel is an independent body comprising professionals who are familiar with the construction and property development industry. The composition of the Panel varies from case to case, depending on the nature of the dispute, and could include architects, engineers, quantity surveyors, valuers, builders, as well as officials from the relevant government agencies.

You will have to refer your disputes to the Panel within 3 months from the date of expiry of the 12-month Defects Liability Period and must have had attempted to resolve the matter privately with your developer, who must be a REDAS member. In trying to reach a fair decision, the Panel will adopt a common sense approach, guided by the law and what is considered established practice in the real estate development industry.
REDAS website : www.redas.com

Consumers Association of Singapore (CASE)

CASE is a non-profit, non-governmental organisation that is committed towards protecting consumers’ interest through information and education, and promoting an environment of fair and ethical trade practices. CASE adopts a three-pronged approach in working towards an ideal consumer-business environment. (If arbitration or litigation services are required, you should consult your own solicitors).
CASE website : www.case.org.sg
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For more information, you may visit the Building and Construction Authority (BCA) web site.