PAM Seminar

PERTUBUHAN AKITEK MALAYSIA CPD Continuing Professional Development Seminar 7th May 2011 Falkuti Alam Bina University Malaya Kuala Lumpur

THE ARCHITECT’S ROLES & RESPONSIBILITIES UNDER THE HOUSING DEVELOPMENT ACT (ACT118) & RELATED REGULATIONS

1. INTRODUCTION

1.1. Overview of the housing delivery process 1.2. Housing Development Act and related Regulations

2. MANAGING DURING CONSTRUCTION

2.1. Work Progress Certification 2.2. Managing Quality

3. MANAGING CHANGE

3.1. Changes & Variation Orders 3.2. Extensions of Time

4. MANAGING DEFECTS & COMPLAINS

4.1. Common Defects & Complains 4.2. Sources of Success in Development

Ar Chan Seong Aun M Arch (Distinction), B Arch (Hons), B Bdg Sc (NZ), APAM, AIPDM, TAM

1. INTRODUCTION

1.1 Overview of Housing Delivery Process The current development approval process in Malaysia is a two stage process consisting of 1. Planning approval and 2. Building Plan approval and cumulating in the issuance of the Certificate of Completion and Compliance (CCC) or certificate of fitness for occupation (CFO) upon completion of the development. With the introduction of the OSC and CCC in 2007 however, all the processes are supposed to be run in parallel. In reality however, many Local Authorities still insist that the land conversion and planning approvals be obtained first before they are willing to accept the building plan submission. In order for the delivery process to be orderly and transparent, it must fall back on a set of laws. For a typical housing development, there are more than a dozen laws and regulations to comply with. 1. National Land Code (Act 56) 1965 2. Town & Country Planning Act 3. Environmental Quality Act 1974 4. Drainage Works Act (Act 354), (Revised 1988), 1954 5. Sewerage Services Act 6. Street, Drainage & Building Act (Act 133), 1974 7. Uniform Building By-Laws 1984 8. Housing Developers (Control and Licensing) Act 1966 (Act 118) 9. Housing Developers (Control and Licensing) Regulations 1989 10. Housing Developers (Housing Development Account) Regulations 1991 11. Housing Developers (Control and Licensing) (Amendment) Act 2002 12. Housing Developers (Control and Licensing) (Amendment) Regulations 2002 13. Housing Developers (Housing Development Account) (Amendment) Regulations 2002 14. Strata Titles Act 1985 (ACT 318) 15. Strata Titles (Federal Territory of Kuala Lumpur) Rules 1988 Are there too many laws? Certainly not. The more rules and regulations there are, the clearer the delivery process to all involved. Why then is there a lack of compliance? This is believed to be due to a lack of understanding of the core reasons these laws were passed. The key reasons for planning laws are to ensure orderly and managed development and to protect our environment for future generations. The key objective of the uniform building by-law is protection of public safety and health. The main reason for the Housing Developer’s Licensing Act is to define & control housing development in Malaysia.

It is this ignorance and lack of understanding of these key objectives that leads to attempts by Developers to bend the law and Local Authorities to impose regressive rules which are not

explicitly listed in the original laws anyway. It is therefore vital for all involved in the delivery process – both Developers and Local Authorities - to align their thinking and actions to the those of the key objectives of these laws, if we want to see any significant improvement in our delivery process . Although the key reason for the Housing Development Act is to control the housing development process, the Act has entrusted certain duties and responsibilities to the Professional Architect.

1. The Architect is required to certify completion of various stages of works in the Standard Sales and Purchase Agreement between the Purchaser and Developer.

2. The Architect is required to certify draw down of the Housing Development Account. In view of this, the Architect now has to assume the additional duties due to the powers conferred on him by the Standard Sales and Purchase Agreement

1.2 Housing Development Act and related Regulations

Principle Act: Housing Development (Control and Licensing) Act 1966 Act 118

Regulations: In force from

Housing Development (Control and Licensing) Regulations 1989

PU(A) 58/1989 01 April 1989

Housing Developers (Housing Development Account) Regulations, 1991

PU(A) 231/1991 26 August 1991

Housing Development (Tribunal for Homebuyer Claims) Regulations 2002

PU(A) 476/2002 1 December 2002

Housing Development (Compounding of Offences) Regulations 2002

PU(A) 475/2002 1 December 2002

Amendments - Acts / Regulations

Housing Developers (Control and Licensing) (Amendment) Act 1977

Act A402 10 June 1977


Act A703 1 December 1988

Housing Developers (Control and Licensing) (Amendment) Regulations 1994

PU(A) 358/1994 01 August 1994


PU(A) 34/1995 01 August 1994


PU(A) 358/1996 01 August 1996


PU(A) 446/1998 12 November 1998

Housing Developers (Control and Licensing) Act A1142 01 December 2002

(Amendment) Act 2002


PU(A) 473/2002 01 December 2002

Housing Developers (Housing Development Account) (Amendment) Regulations 2002

PU(A) 474/2002 01 December 2002

Housing Development (Control and Licensing) (Amendment) Regulations 2003

PU(A) 226/2003 01 December 2002

Housing Developers (Control and Licensing) (Amendment) Regulations 2002 - Corriegendum

PU(A) 42/2003 07 February 2003


Act A1289 15 February 2007

Bills:

Building and Common Property (Maintenance and Management ) Bill 2006

12 April 2007

Housing Development (Control and Licensing) (Amendment) Bill 2006

12 April 2007

STRATA TITLES ACTS

Principle Act: Strata Titles Act 1985 (ACT 318)

Amendment Acts / Law: In force from

Strata Titles (Amendment) Act 1990 Act A753 23 February 1990

Strata Titles (Federal Territory of Kuala Lumpur) (Amendment) Rules 1995

PU(A) 22/1995 20 January 1995

Strata Titles (Amendment) Act 1996 Act A951 02 August 1996

Strata Titles (Amendment) Act 2001 Act A1107 01 December 2001 [PU(B)560/2001]

Strata Titles (Amendment) Act 2007 Amendment Act A1290

12/04/2007

RULES:

Strata Titles (Federal Territory of Kuala Lumpur) Rule s 1988

PU(A) 164/1988

23 April 1988

Federal Territory of Putrajaya (Modification of Strata Titles act 1985) Order 2002

PU(A) 503/2002

27 December 2002

Strata Titles (Federal Territory of Putrajaya) Rules 2003 PU(A) 5/2003 09 January 2003

Bills:

Strata Titles (Amendment) Bill 2006 12 April 2007

HOUSING DEVELOPMENT (CONTROL & LICENSING) ACT 1966 The following parts will have impact on Architects. Part I defines what is “housing development” – more than 4 lots Part II requires Developers to be licensed and minimum paid up capital Part III defines the basic duties of a housing developer including the opening and maintenance of the Housing Development Account Part IV Investigation and enforcement Part V Powers of Minister to give directions to safeguard the interest of purchasers Section 13A Controller to report the conduct of and Architect or Engineer Part VI Tribunal for Home Buyers Claims Part VII Miscellaneous covers fines for offences and liability of directors, managers and other officers Section 24 empowers the Minister to make regulations

HOUSING DEVELOPERS (CONTROL & LICENSING) REGULATIONS 1989 In 1986 when the Malaysia economy went into recession, many Developers faced financial difficulties resulting in abandoned housing projects and projects never starting construction despite having been sold. The problems caused by one sided agreements and terms of sales were reviewed by the then Minister of Hosuing and under the powers contained in section 24 of the Act, introduced the Housing Development (Control and Licensing) Regulation 1989. Of interest to Architects are the following regulations. Regulation 11 – standard contract of sale – required that the Standard Sales and Purchase Agreement (Schedule G & H) must be used. Schedule-G Standard Sale and Purchase Agreement for land and building Clause 4 – Schedule of Payment Part 1 Installment payments in the time and manner set out in Third Schedule of the SPA Part 2 Notice to purchaser supported by certificate signed by vendor’s Architect or Engineer and this shall be sufficient proof of completion Clause 13 – Position and area of the lot Part 2 states Vendor may claim up to maximum 2% deviations. Part 4 No alterations are allowed Clause 14 – Materials and workmanship to conform to description Building to be constructed in a good workmanlike manner Note

1. Building description as set out in Fourth Schedule - the specifications of finishes, fixtures and fittings

2. Approved building plans as in Second Schedule – Key document is the approved building plans

3. No changes or deviations without the written consent of the purchaser except as required by appropriate authority

4. If changes or deviations involve the substitution or use of cheaper materials or omission of works, purchaser is entitled to corresponding reduction in price or damages.

Clause 15 – Restriction against variation by purchaser. Until after CCC/CFO Clause 16 – Restriction against change of colour scheme Clause 21 – Compliance with written laws. Architect has to ensure compliance with UBBL and Street Drainage Building Act Clause 19 – New laws affecting housing development Developer to absorb any additional costs Clause 19 – Time for handing over of vacant possession 24 months for landed property Clause 21 – Manner of delivery of vacant possession Clause 20 – Defects liability period 24 months from date of handing over vacant possession. Schedule-H Standard Sale and Purchase Agreement for sub-divided building In addition to the above for sub-divide buildings, the main points of interest to Architects are as follows. Clause 11(1) – Separate Strata title and transfer of title. Developer has to apply for strata title at his own cost. Under clause 9(b) of the Strata Titles Act, Architect is required to certify that the parcel was constructed according to the approved plans. Clause 13 – Position and area of parcel. Different from schedule-G, Developer has to compensate the purchaser if the area of the parcel is smaller by more than 2 percent but not allowed to claim if parcel is constructed larger. Clause 15 – Restrictions against variation by the Purchaser. This will become relevant if the purchaser makes changes after the CFO/CCC is issued but Strata Title is not issued yet as it will involve significant work by the Architect to re-submit plans for building plan approval. Clause 25 – Time for delivery of vacant possession 36 months instead of 24 months for landed properties. Clause 27 – Completion of common facilities

Completion of common facilities is also 36 months. It is important that the Architect clearly define what is included in the common facilities for phased completion. This is done in the Second Schedule. HOUSING DEVELOPERS (HOUSING DEVELOPMENT ACCOUNT) REGULATIONS 1991 Purpose is to ensure the interests of Purchasers are protected. DEPOSITS Developer has to deposit the following into the Housing Development Account

a) All installments of purchase price b) Any loans for the construction c) Interests obtained from the above

WITHDRAWALS This is permitted only for purposes prescribed in Regulation 7 as follows

a) Payments of quit rent, rates taxes, assessment levied on the land b) Stamp duty on charges, caveat, debenture, guarantee or memorandum of deposit of

title c) Legal fees for SPA, charges, caveat, debenture, guarantee or memorandum of deposit

of title or other matters. d) Insurance premiums and Professional Fees e) Cost for the following : Soil investigation, earthworks, foundation, building, external

works, survey works, infrastructure works, relocation of squatters, other works f) Contributions to water and electricity supply g) Charges to Government departments h) Refund of progress payments i) Interest on loans and other financial charges j) Capital sums to redeem loans on land purchases k) Payment of cost of land l) Capital sum to redeem loans for construction m) Administrative expenses up to a maximum of 10% of total construction cost n) Taxes on the development o) Other reasonable expenses upon written approval of the Controller of Housing

Any withdrawals for purposes of construction must be supported by a certificate issued by the Architect or Engineer in charge of the housing project. After the issuance of the CCC and upon handing over of vacant possession, the Developer may withdraw any surplus monies subject to the following. 2. I hereby certify that the following amounts are still needed to satisfy

the Developer Obligations:-

(a) An amount needed to comply with conditions of Certificate of Fitness Architect

(Where Temporary Certificate is issued)

(b) An amount needed to obtain separate Document of Title

Surveyor

(c) An amount needed for the cost and expenses of maintaining, up keeping and repairing the areas reserved for roads, open spaces, electricity substation, septic tanks and other communal amenities, until the same is taken over by the Appropriate Authority.

Developer QS

(d) An amount needed to keep purchasers Indemnified against fines, penalties or looses incurred by reason of any breach of the provision of any written law relating to the Housing Development.

Developer

(e) An amount needed to rectify any defects, shrinkages, or other faults in the said Building, which may become apparent within a period of twelve (12)/ eighteen (18) months after the date of handing over vacant possession (which amount should be in addition to the amount held by the Developer’s Solicitor as stakeholder.)

Architect QS

(f) An amount needed as outstanding Developer’s solicitor’s cost.

Lawyer Developer

(g) Administrative expenses.

Developer

(h) Any other cost which has not been spelled out, as above which the architect may deem necessary.

Balance may deem necessary Architect Balance of payment to contractor Architect

QS Balance of payment to consultant Consultants Total (a) to (h) Architect Add 10% for the contingencies and inflation HOUSING DEVELOPERS (TRIBUNAL FOR HOUSE BUYER CLAIMS) REGULATIONS 2002 This is the venue for house buyers to make claims against Developers without engaging Lawyers. Part VI Section 16U(2) of main Act states that no party shall be represented by an advocate and solicitor unless in the opinion of the Tribunal the matter in question involves complex issues of law.

The Tribunal shall hear any claim brought by a homebuyer not later than twelve months from the date of issuance of the certificate of fitness for occupation for the housing accommodation or the expiry date of the defects liability period as set out in the sale and purchase agreement.

Proceeding open to public. Awards where practicable to be made in 60 days. Awards final and binding. Criminal penalty for failure to comply.

2. MANAGING DURING CONSTRUCTION

2.1 Work Progress Certification CHECKLIST FOR HOUSING CERTIFICATION

• Assist the Developer to prepare S&P schedules to ensure they are not different from the contract documents between Developer & Contractor

• Get a copy of the S&P and check against approved building plans and contract documents especially dimensions and floor areas

• Check against Lembaga Arkitek Malaysia Circulars 1/2001, 1/2001 (Revised 2002), 4/2003 and 4/2003 (Revised 2005)

• Check to ensure the S&P is within the Housing Developer Housing Act. Commercial properties such as Service Apartments are not covered under the act and these guidelines do not apply

• Check finishes against those listed in the Tender / Contract Documents to ensure the finishes and sanitary fittings match. Also check that the number and type of electrical points match those in the tender or contract documents.

• Ensure the correct version of the S&P Agreement is being used - Before and after the 1st December 2002

• Check the mirroring of terraced houses are properly shown in the S&P the Lawyers are using

• Check that the correct plans for the corner and end units are being used as well as the specifications as corner unit specifications may differ from the standard or intermediate units.

CERTIFICATION FOR VACANT POSSESSION – STAGE 3 This is the Most critical stage of Certification for the Architect must check strictly that ALL items listed as “Works to be Completed” must be fully complied. Many complains have been lodged against Architects for wrongly certifying this stage and have been reprimanded and fined by LAM Professional Architect’s Role for Stage 3 Issue a certificate certifying that the said building has been duly constructed and completed in accordance with the relevant Acts, by-laws, and regulations and that all conditions imposed by the Appropriate Authority in respect of the issuance of the Certificate of Fitness for Occupation have been duly complied with

NOTE It is the Vendor’s responsibility to obtain a letter of confirmation from the Appropriate Authority certifying that Form-E as prescribed under the Second Schedule to the Uniform Building By-laws 1984 has been duly submitted , checked and accepted by the Appropriate Authority

CONDITIONS TO BE COMPLIED BEFORE VACANT POSSESSION CAN BE GIVEN 1.Architect has issue Stage 3 Certificate that construction of the building has been duly completed with water and electricity supply ready for connection 2.Vendor has applied for issuance of CFO from Appropriate authority – Borang-E has been accepted by Local Authority 3.Purchaser has paid al monies due under clause 4(1) in accordance with the 3rd schedule 4.Purchaser has performed and observed all terms and convenants on his part under the S&P 2.2 Managing Quality QUALITY STANDARDS FOR ARCHITECTURAL WORKS Determining what is acceptable quality for architectural finishes is often difficult as there is the “arbitrary” or “subjective” dimension to all decisions. In order to remove this subject “subjectiveness” dimension, we have to fall back on industry-accepted norms, which are often listed as standards. Although there are a few hundred Malaysian Standards available for the Building Construction industry this is very far short of the 6,000 standards required for a comprehensive reference base on which to determine proper standards. Malaysian Standards for architectural finishes are even fewer – less than 10. CIS7 and CONQUAS21 do list some quality standards for architectural works. They are however not widely accepted and Architects have to fall back on their specifications to determine standards for finishes. Listed below are some references for sourcing tolerances for architectural works standards.

• BS 8110 : Part 1 1997 Section 6. Concrete materials, specification and construction – Section 6.2.7.2 Quality of finishes & Section 6.2.8 Dimensional deviations

• QLASSIC Section 4 – Quality Standards for Architectural works • CONQUAS21 – Appendix 2 - Quality Standards for Architectural works • Guides to Standards and Tolerances – Victoria Building Commission, Australia • ISO 1803 :1997 – Building construction – Tolerances – Principles & terminology

TOLERANCES FOR ARCHITECTURAL WORK Listed below are tolerances of key architectural elements extracted from the above sources. ELEMENT STANDARDS TOLERANCE SOURCE Finished concrete All surfaces should not have cracks Max 0.3 mm CIS7 All cross-section dimensions must

conform to structural drawings 10 mm CIS7

CONQUAS Openings for services must conform to

specified size and location Size 10 mm Location 25 mm

CIS7

Structural column vertical alignment 3mm/1m max 20mm

CIS7

Structural slab horizontal alignment 10mm CIS7 Cast in place concrete elements 10mm CIS7 Minimum finished concrete cover 3mm CIS7 Pre-cast Concrete BS8110 Length BS8110 Up to 3m 6mm 3m-4.5m 9mm 4.5m-6m 12mm Add for every additional 6m 6mm Cross section BS8110 Up to 500mm 6mm 500mm-750mm 9mm 4.5m-6m 12mm Add for every additional 250mm 3m Straightness or bow BS8110 Up to 3m 6mm 3m-6m 9mm 6-12 12mm Add for every additional 6m 6mm Floor Finishes Cracks Width 0.3mm

Length 200mm CIS7

Evenness 3mm per 1.2m CIS7 CONQUAS

Staircases 5mm CIS7 CONQUAS

Tile finishes butt width 2mm-4mm CIS7 Lippage between 2 tiles 1mm CIS7

CONQUAS

Internal Walls Evenness 3mm per 1.2m CIS7

CONQUAS Verticality 3mm per 1m CIS7

CONQUAS Walls at right angle 4mm over

300mm CIS7 CONQUAS

Plastering 3mm per 1.2m CIS7 CONQUAS

Tiling – lippage between 2 tiles 1mm CIS7 CONQUAS

Ceiling Finishes Cracks Width 0.3mm

Length 200mm CIS7

Evenness 3mm per 1.2m CIS7 CONQUAS

External Walls Verticality 3mm per 1.2m CIS7

CONQUAS Tile finishes butt width 2mm-4mm CIS7

CONQUAS Facing brickworks = joint pointing 10mm CIS7

CONQUAS Doors Gap between door leave & frame 5mm CIS7

CONQUAS Windows Gap between window leave & frame 5mm CIS7

CONQUAS Roof Flat roof ponding Less than 3mm CIS7

CONQUAS Flat roof cracks Width 0.3mm

Length 200mm CIS7

Gutter 3mm CIS7 Fixtures & Fittings Location 25mm CIS7

ROLES & RESPONSIBILITIES OF THE ARCHITECT FOR QUALITY UNDER THE STANDARD SALES & PURCHASE AGREEMENT FOR HOUSING According to the Standard Sales and Purchase agreement for housing in Malaysia between Developers and House buyers, the role of the Architect is only to certify for completion of works according to the Third Schedule (Clause 4(1)) of the said agreement. Clause 4(2) states “Every notice referred to in the Third Schedule requesting for payment shall be supported by a certificate signed by the Vendor’s Architect or Engineer in charge of the housing development and every such certificate so signed shall be proof that the works therein referred to has been completed” The conclusions that can be drawn for this are as follows

1. There is no mention of the role of the Architect in the Standard S&P that he has to decide on quality of workmanship, although it can be reasonably assumed that the Architect would only certify for works that have been completed to a “reasonable” standard. This is an implied duty of the Architect and not specifically stated.

2. Unlike the PAM98 form of Contract, the S&P does not empower the Architect to make the final decision on quality

3. The works as described in the Third Schedule shall be DEEMED COMPLETED under this contract upon issuance of the certificate by the Architect

How then are quality issues decided upon in the Standard S&P agreement? Clause (14) Materials and Workmanship to Conform to Description states “….shall be constructed in a good and workmanlike manner in accordance with the description set out in the Fourth Schedule and in accordance with the plans approved by the Appropriate Authority….except changes as may be required by the Appropriate Authority. The purchaser shall not be liable for such changes….in the event that the changes or deviations involve the substitution or use of cheaper materials or the omission of works originally agreed to be carried out by the by the Vendor the Purchaser shall be entitled to a corresponding reduction in the Purchase Price herein or to damages as the case may be.” It would appear that the quality of workmanship is tied to two documents as follows.

1. The FOURTH SCHEDULE which for almost all cases is so vague that no reasonable conclusion can be drawn regarding quality. There is no reference to any Standard or to more detail specifications.

2. “plans approved by the Appropriate Authority” would obviously refer to the approved building plans. Note that any changes to the approved Building Plans after the S&P have been signed does NOT entitle the Developer / Vendor to claim for any increase in his sale price. Any down grading, including downgrade in quality, entitles the Purchaser to a corresponding reduction in the purchase price.

The following are the implications.

• The Housing Developer Act needs to be upgraded to refer the Fourth Schedule to

more detailed specifications and Standards. • The approved Building Plan is a very important point of reference as far as quality is

concerned, but unfortunately most Architects do not specify quality in their plans preferring to describe it in their “Specifications” which do NOT form part of the S&P agreement.

• Architects should freeze their design and the building plans as soon as the first S&P is signed as any upgrades to the BP do NOT entitle the Developer to a corresponding increase in price but any downgrades entitles the Purchaser to a corresponding decrease in the sale price.

• The Architect does not have the powers under the standard S&P to make the final decision regarding quality. This is covered by Section 16(a) – 16(i) of the Housing Developers Act - Tribunal for House buyers Claims – Claims up to RM 25,000. Decision of Tribunal to be final. Criminal penalty for failure to comply.

• Based on the above, the Board of Architects does not hold the Architect responsible for workmanship quality under the Standard S&P for housing and therefore any complains against Architects regarding housing quality are referred back to the Developer or for the Purchaser to take up with the Tribunal for House buyers – which is the final decision maker with regards to Housing Quality.

ROLES & RESPONSIBILITIES OF THE ARCHITECT UNDER THE UBBL The UBBL 1984 hold the qualified person – The Architect in this case – for the building for which the person has submitted the plans. These are listed in the following by-laws. By-law section Responsibility 3(1)(c) Bear the certification of the qualified person………….by-laws

for which they are respectively responsible 5 ……qualified person or any person authorized by him

undertakes the supervision of the erection and the setting out, where applicable of the building

7(1) The qualified person submitting the plans shall be responsible for the proper execution of the works………

25(1)(a) ….they have supervised the erection of the building……constructed in accordance with the bylaws….they accept full responsibility for those portions for portions which they are respectively concerned with….

Borang-A,C,D,E I certify and accept full responsibility………

There is therefore little doubt regarding the responsibility of the Architect in respect of the UBBL 1984. Is there however an implied responsibility for the QUALITY of the works completed? UBBL in itself does not mention quality requirements and so long as the quality of the building element does not affect the “safety and health” aspect of the building, there is no directly implied responsibility for the quality aspect of the building.

The Board of Architect Malaysia has taken a similar view in that the UBBL 1984 requires the Architect to only take responsibility for the “safety and health” aspect of the building. The Architect must however ensure for example that the staircases riser shall not be more than 180mm and the tread not less than 255mm under by-law 106(1) as this is a fire by-law requirement and not a “quality” requirement. The Building & Construction Authority of Singapore BCA has taken an identical position as explained in their FAQ for CONQUAS outlined below. Why BCA issue Temporary Occupation Permit (TOP) where workmanship is poor? The TOP signifies that the completed building works have complied with the provisions of the building regulation, which focus primarily on human safety, and with the requirements of the various technical authorities, so that the completed building can be occupied. However, TOP does not ensure that materials have been accordance to the Sale & Purchase (S&P) agreement or quality of works as promised in sales document. These disputes should be brought directly to and resolved with the developer. ROLES & RESPONSIBILITIES OF THE ARCHITECT WITH REGARDS TO QUALITY OF WORKS IN THE ISSUANCE OF CCC For similar reasons to those explained in relation to the application for Certificate of Fitness for Occupation, when the UBBL was amended for Architects to issue the Certificate of Compliance and Completion – CCC effective from 12th April 2007, so long as the building has meet all technical compliance in relation to the UBBL in protecting public safety and health, the building should be deemed fit for issuance of the CCC, “regardless of the quality of the workmanship”, provided it is deemed reasonable by the Architect or other qualified person. Only workmanship and materials quality in compliance with safety and health requirements of the UBBL 1984 must meet the minimum requirements as outlined in the by-law or other relevant standards.

3. MANAGING CHANGE 3.1 Changes and Variation Orders

Unlike standard building contracts, the Standard Sales and purchase agreement does not encourage change once the building plan has been approved and the SPA has been signed between the house buyer and developer. Clause 13 of the Housing Development Regulation 1989 requires the consent of the house buyer for any changes. It is therefore highly recommended that the design be “frozen” once the first SPA has been signed, especially for mass housing. Architects must also be mindful of their position in relation to the Building Contract and the S&P. In the case of the standard building contract, the Architect takes the role of “quasi arbitrator” once the contract has been awarded to the contractor and he is empowered under the contract to make changes. In the case of the Standard Housing S&P, which is also a contract, his role is restricted to that of “certifier of completion” only. Any disputes as to the requirement for change rests with the House Buyer Tribunal as the following digram illustrates.

Many Architects also often face the problem of “never ending changes by the various departments of the developer, often with no compensation for these changes as none of their staff are prepared to sign off on “acceptance of design” before requesting for start of the next stage. One useful way to overcome this is to follow the ISO 9001 procedure of requesting for sign off on the “Client Satisfaction survey form” for each stage of the works which signifies completion of the stage and requesting for feedback on your performance. A typical survey form would be as follows.

3.2 Extension of Time Are Developers entitled to request for waiver of interest on late delivery if their Contractors delay the works or there is a shortage of materials for construction? Developers often applied to the Controller of housing for waiver from paying of interest for late delivery. There is however a leading case for this legal proposition in SEA Housing Sdn Bhd vs Lee Poh Choo [1982](2 MLJ 31) in which the purchaser sued the developer for breach of contract and for delivery of the title to a house he had purchased. The property in question was completed after 23 months, instead of 18 months as stated in the SPA. The issue before the court was whether the developer could be excused for the delay due to acute shortage of building materials, a state of affairs which was at that time public knowledge. The developer relied on Clause 32 of the agreement, which purported to exempt it if non-fulfillment of any term was caused by circumstances beyond its control. The High Court trial judge held that the 1966 Act and the 1970 Rules were passed by the authorities to protect the interests of the public and the developer could not contract out of the Rules. The developer's appeal to the Federal Court was dismissed. To date there have been no cases where Developers have been exempted for late delivery penalties.

4. MANAGING DEFECTS & COMPLAINS

4.1 Common Defects & Complains

HBA Complaints Statistics 2006 Types of Complaints % 1. Strata titles 30 2. Management & Maintenance 24 3. Late delivery & LAD claims 12 4. Certificate of Fitness 9 5. Abandoned projects 14 6. Shoddy workmanship & defects 7 7. Non-adherence to building plans 1 8. Infrastructure 1

9 Failure to recovery on Awards / Prosecution of Awards - Section 16AD

2

Number Of Complaints Received by States by Types For Year 2000

No. Types Of Complaints/States

SGR PLS P.P PRK KED N.S MEL JOH W.P KEL TRG PHG TOTAL

1. Defective Workmanship 82 0 26 12 14 14 7 18 28 0 0 11 212

2. Compensation 124 0 28 14 6 4 0 0 60 0 1 10 247

3. Payment 20 0 15 6 4 8 9 7 23 0 0 0 92

4. CFO 47 0 4 3 1 1 0 1 26 2 1 9 95

5. Late Delivery Of Houses 97 0 38 24 15 24 14 24 83 12 1 16 348

6. Interest 40 0 4 1 3 14 5 17 9 0 1 4 98

7. Not Conforming To Plan 14 0 10 6 1 0 1 3 98 0 0 2 135

8. Service 20 0 17 5 2 4 2 3 51 4 2 3 113

9. Cheating 2 0 1 3 1 2 0 0 8 0 0 0 17

10. Deposit/Ownership 21 1 5 2 1 1 4 4 13 0 0 2 54

11. Infrastructure 0 0 3 0 0 1 0 0 1 0 0 1 6

12. Contravene Act/Regulations 12 0 15 7 9 2 0 1 9 1 0 2 58

13. Others 177 1 50 27 15 9 0 5 32 4 3 25 348

Total 656 2 216 110 72 84 42 83 441 23 9 85 1823

No. of Abandoned Housing Projects by States As At December 2000

No. State No. of Projects No. of Houses No. of Buyers Estimated Cost

(RM Million)

1.

Perlis 15 1,591 564 91.27

2.

Kedah 23 3,795 2,983 148.92

3.

Penang 41 8,364 3,754 633.21

4.

Perak 78 12,742 8,406 596.55

5.

Selangor 80 17,544 12,914 1,622.65

6.

W. Persekutuan 25 15,107 9,104 1,980.9

7.

N. Sembilan 52 11,170 5,947 521.73

8.

Melaka 29 5,146 3,518 383.5

9.

Johor 69 20,067 14,423 939.71

10.

Kelantan 37 4,241 2,218 191.72

11.

Terengganu 33 1,557 790 78.35

12. Pahang 32 6,378 3,719 53.9

Total 514* 107,702 68,340 7,542.41

Source : Research and Development Division, National Housing Department, Malaysia, April 2001

As the various surveys show, the three most complains form house buyers in order of frequency is as follows.

1. Late delivery of houses

2. Compensation

3. Defective workmanship

Section 2.2 already deals with ways to improve quality of workmanship thereby reducing defective works. The question of delays in delivery shows a lack of basic management skills and techniques in ensuring timely and proper completion of projects. This usually arises with new developers who are under capitalized and lack the necessary experience. Many of these would become abandoned housing projects when the economic climate become poor.

4.1 Sources of Success in Development The “reverse side of the coin “ is to look at what developers consider to be the source of successful developments”. For this we refer to the University Sains Malaysia Housing Building and Planning faculty research carried out in 2005. The following were identified as the key success factors.

Source :

AN ANALYSIS OF COMPETITIVENESS OF HOUSING DEVELOPERS IN MALAYSIA Assoc Prof Abdul Rashid Abdul Aziz Ho Shiew Yi School of Housing Building and Planning Universiti Sains Malaysia Penang

The following were identified as top 10 key success factors.

1. Prime location of land 2. Cash flow 3. Understanding market potentials 4. Relationship with local authorities 5. Management expertise and experience 6. Organisation and service reputation 7. Ability to manage change 8. Relationship with competent support services providers 9. Skilled employees 10. Management tolerance to risks and

It is therefore just as important for Architects to look beyond the Laws and recognize when the conditions are not right for a successful housing development and to walk away from a project that has all the wrong conditions.. If not then in a best case scenario, he would have wasted a lot of his time and the project never takes off and he is not paid. In a worse case scenario, the project becomes abandoned and a few hundred people lose their life savings.

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