corpbabes wrote: |
Greetings! I stumbled across this website and thought it's really fantastic that people can discuss and get information here. I'm a newbie and I'm just wondering if anyone can help me. My question is : is there any statutory prescriptions in relation to warranty periods for construction works buildings, designs etc for theme park related works. Also what if personal injury and death, can warranty period and exclusion of liability help reduce liability ? I would be glad if someone can explain these issues to me. Thank you in anticipation. |
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Ahvincent's Response
The statutory limit is normally six years. However, it can sometimes be extended to 12 years.
In the construction business some defects are latent i.e. it cannot be readily identified by a competent engineer for example concrete cancer which can take years to become evident.
In such cases the six years may start from the date that circumstances that could lead to a claim was first identified.
Exclusions can sometimes help but remember you cannot contract out of the law. You may exclude certain things but you definitely cannot exclude death or injury due to you negligence, error or omission.
In simple words you can have a sign on the front door to say "Enter at your own risk - no liability accepted." But if I was killed because you did not install the sign properly and it fell down and bang me on the head, you will be liable for damages. Or if your roller coaster ride fell off it's tracks due to poor maintenance or neglect than you can be sued for damages under the law of tort.
But having say all that - Yes, a limitation clause is good to have. It is better than nothing and gives your lawyers something to work with in the event of a claim.
However, the difficult thing in design and construction is "how to get the other party to agree and sign the contract that contains clauses that potentially decreases your liability. Unless that other fellow's lawyer cannot read.
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Nik Zafri's Response
corpbabes wrote: |
Greetings! I stumbled across this website and thought it's really fantastic that people can discuss and get information here. I'm a newbie and I'm just wondering if anyone can help me. |
Welcome corpbabes...that is why GMN is my first choice!
corpbabes wrote: |
My question is : is there any statutory prescriptions in relation to warranty periods for construction works buildings, designs etc . |
Depending on which stage that you're referring to - pre-construction, during construction and post construction? You see, different countries may adopt different practices, terminologies and timeframe. (which will affect the contract)
If you care to delve further in this very same topic, you will see that we've been discussing 'heavily' about Defect Liability Period, Warranty Period, Developer's Warranty etc. Try to have a look, probably it would help you and us further to understand the issue. (I'm sure you've heard the Govt is planning to revise and standardize these practices - but I'm unsure when)
corpbabes wrote: |
for theme park related works |
Or perhaps you may be referring to 'during the theme park already in operation - if so, which target group? 'the theme park workers?'? The theme park visitors? The 'entertainment machines'? (roller coaster, merry-go-round etc.)
corpbabes wrote: |
Also what if personal injury and death, can warranty period and exclusion of liability help reduce liability ? |
Again, depending on which stage...and as ahvincent said - something like- this case should be mentioned in the contract to avoid future ambiguity and 'conflict'.
corpbabes wrote: |
I would be glad if someone can explain these issues to me. Thank you in anticipation. |
Don't worry, GMN has a handful of helpful hands (3H)...ahvincent is definitely one of them...
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Response from corpbabes - 26/10/2007
Hello again!
Thanks so much for such prompt reply! Really appreciate it. I know my questions were not really specific and vague, hence Im trying to get more information regarding that before enquiring further.
Sorry for being so ignorant, coz Im really new in this field,Im just a pupil doing a research in this area. So forgive me if I sound so blur!
Im just wondering what happens if the defects occur after the warranty period, who will be liable and is there any legislations regarding this? As for the owner of the building for example, is his liability reduced if anything happens after the warranty period is over?
Also, can I give an anology: Say in a high rise building in genting, a disaster happen due to a design defect ; Contractually we exclude design defects and say construction defects, in death or personal injury, therefore can we say that in this scenario that the project owner be liable? What if we have designer and builder ... To what extent can we pass the buck to them?
Thanks in advance for all the assistance
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ahvincent wrote: |
Your question is many questions in one. Without being specific it is very difficult to answer. Firstly, if you identify a defect after the defects liability period then you don't stand much of a chance of a successful claim. If I bought an apartment from you (the owner) and I identify a defect within the warranty period, of course I will sue you. The contract of sale is between me and you. It has nothing to do with the builder who may have designed and constructed the apartments. I, the buyer do not have a contract with the builder, the owner does. The builder does not owe me a duty. I did not hire him and neither did I pay him, so how can I hold him responsible. I can only sue the owner who sold me the faulty apartment. However, the owner may join the builder as a co-defendent on the basis that as a result of his (the builder's) negligence he is now being sued and the builder should be held responsible. I guess one of your questions is "the owner has stated in the contract that he is not responsible for design and construction faults" thus trying to avoid any liability. I am afraid that attempt will fail. I, as the buyer can expect that the apartment is "fit for it's intended purpose." So, regardless of what you the owner try to do you will still be liable. Remember what I said before "you cannot contract out of the law." The law of tort will be on my side (the buyer). I have every right to enjoy my purchase. If you sold me an apartment and the roof falls down in 6 months and the walls start to crumble and the floor starts to sink, I will ask the court "what did you sell me?" I tell the court that you the owner sold me a faulty product and I want my money back !!!. You did not sell me an apartment that is fit for it's intended purpose i.e. as a place of residence. I will strongly suggest that a good lawyer for the owner will not try to get out of it by simply denying liability because the case is so obvious. He, the owner can quickly run away, change his name and go into hiding or he will quickly join the designer and constructor as co-defendants and seek proportional liability. Anyway, your questions sounds very unethical by trying to pass the buck. Forget it !!! No lawyer worth his salt will let you get away with putting such irresponsible "get-out of jail free" clauses. The text books tell us that the law is fair. Therefore you can try to be smart and put in lots of sneaky clauses but since the law is potentially fair it will rule any unreasonable clauses to be null & void and find you liable. There are plenty of fish in the sea. I always advise my clients if the other party wants everything in their favour - walk away from the deal. You don't want to do business with such unreasonable people. Unless of course he makes you an offer too good to refuse. But again - nobody gives away something for nothing. |
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Nik Zafri's response
Good one ahvincent!!
My turn :
corpbabes wrote: |
Im just wondering what happens if the defects occur after the warranty period, who will be liable and is there any legislations regarding this? As for the owner of the building for example, is his liability reduced if anything happens after the warranty period is over? |
That's why looking into SPA (sales and purchase agreement) is very important before signing them - (that goes to everyone..not only housebuyers but property buyers as well) we don't want to end up in sticky situations like this one. I BET no party (developers, builders, bankers, lawyers) would tell you of your RIGHTS (esp. implied ones) since their interest in ONLY to sell and attempted to their best 'intellectual' knowledge NOT to be accountable.
These parties make you look merely into the 'expressed' terms but somehow they failed or ignore/deny your rights to know the 'implied' ones.
One example - You may or may not know that even during DEFECT LIABILITY PERIOD (DFL), the purchaser/buyer has implied RIGHTS to know what's going on - otherwise, how would we know of the final quality? How 'd heck' CMGD or CF (they keep changing the terms - now they call it "Certificate of Fitness for Occupation (CFO) be issued on the first place and suddenly we buyers found out that we have been 'had' when 'leaks' are discovered in our so-called newly bought houses or buildings?
Here's another 'masterpiece' :
http://www.nst.com.my/Weekly/PropertyTimes/News/Viewpoint/20030305105233/Article/
The waiting game
Many house buyers complain of having to take over of vacant possession (VP) of their new houses when they are not ready for occupation.
One of the reasons for this is that prior to amendment, the Housing Developers Act allowed developers to hand over VP upon application for the Certificates of Fitness for Occupation (CF). Many developers exploited this tenet of the Act by rushing to hand over the properties the minute the architect declared “practical completion”.
Problems for buyers
The hand over of VP without a confirmed date for occupancy has created numerous problems for house buyers. First, the new owners would have to make all outstanding payments as stipulated in the Third Schedule of the Sale and Purchase Agreement (SPA) upon taking VP. Next, the 18-month defect liability period would start to run 14 days from the date of notification of the hand over of VP, and third, the buyers would have to take over the responsibility for the security of their properties.
This state of affairs is grossly unfair to buyers. Imagine not being able to stay in your property after you’ve made all the outstanding payments, including maintenance charges. And if you’re not able to stay in your house, how will you identify and rectify faults that may be caused by the developer? Supposing the CF is issued six months after you receive your keys; this means six months of the defect liability period would have been wasted. Another point is that if you cannot stay in your home, how can you prevent vandalism and theft of your fittings, short of hiring a security guard, which many cannot afford?
Besides these, the house Buyers Association has come across other complaints from buyers who have been shown CFs from other projects that have been presented as theirs or CFs with falsified endorsements! Some buyers have taken VP, only to find that the developers have financial difficulty in fulfilling their obligations to apply for the CF!
Developers’ responsibility
The application for CF is governed by the Building By-laws Act. As the name implies, the CF is an official document issued by the local authority to acknowledge that a building is safe for occupation.
It is the responsibility of the developer through its appointed qualified professionals, chiefly the architect, to make the application according to the Building By-laws and other conditions imposed by the appropriate authorities.
When complaints surface, both developers and the appropriate authorities point fingers at each other. As explained by Ministry of Housing and Local Government legal adviser Shamsulbahri bin Ibrahim, and advocate and solicitor Toong Gek Fong, in an article on the Malaysian Law Journal website (http://www.mlj.com.my/free/index.asp): “The crux of the problems relating to delay in issuance of CFO could be because:
1. The developer’s application for CFO is incomplete or not in compliance with all the requirements necessary for the issuance of CFO, resulting in the application being rejected by the appropriate authority. For instance, some developers fail to submit the Form E together with copies of all letters of clearance or approval (surat sokongan) from the relevant technical agencies, which are required by the appropriate authority for issuance of CFO, or
2. The delay or inefficiency of the appropriate authority issuing the CFO.”
To exonerate the local authorities from blame, the Ministry of Housing has issued directives to the effect that:
• All applications for CF submitted by developer are to be checked and confirmed to be in compliance with all requirements for issuance of CF before such applications shall be accepted by the appropriate authority;
• Upon acceptance of the Form E, the appropriate authority is to issue its written confirmation that the Form E submitted by the developer has been duly checked and accepted by the appropriate authority;
• Once such applications have been duly checked and accepted by the appropriate authority, the CF shall be issued or deemed to be issued within 14 days from the date such applications are accepted by the appropriate authority; and
• The appropriate authority will submit a written report/explanation to the Housing Ministry in respect of such cases where the CF is not issued within 14 days from the date the relevant application is accepted by the appropriate authority and in any other cases of undue delay in the issuance of the CF by the appropriate authority.
By-law 25 of the Uniform Building By-Laws 1984 was amended to provide for the issuance of the CF by the appropriate authority within 14 days from the date of acceptance of Form E, failing which the CF shall be deemed to be issued to the owner of the building.
Under the amended Housing Development Act, developers’ responsibility with regard to VP and the CF has been expanded to include the following:
1. Conditions for delivery of vacant possession
It must submit a supporting certificate signed by its architect certifying that the building has been duly constructed and completed in accordance with all relevant Acts, by-laws and regulations and that all conditions by the appropriate authority in respect of the CF have been duly complied with and a supporting letter of confirmation from the appropriate authority certifying that the Form E (the application form for CF) has been duly submitted by the developer and checked and accepted by the appropriate authority.
• Duties to the Controller of Housing:
It must inform the Controller of the handing over of VP to the buyers and submit a certified true copy of the architect’s completion certificate and that water and electricity supply are ready for connection. It must also inform the Controller if the appropriate authority has refused to accept the submission of any document relating to the issuance of the CF and submit the refusal letter from the appropriate authority.
With the amendments to the Housing Development Act and the Building By-laws, it would seem that when house buyers receive notice of hand over of VP, they can assume safely that the occupancy of the property can be confirmed within 28 days of the notice. If not, the hand over of vacant possession can be considered premature, and the house buyer has every right to challenge the notice and asked the developer to withdraw it.
With the amendments too, the HBA sees no cause for local authorities to issue temporary certificates of fitness as it is not to the house buyers’ advantage to occupy a home based on such a certificate.
We hope the Ministry of Housing is confident enough to implement further amendments of the Act, such as imposing that the delivery of VP comes with the CF. It is only right that a buyer should be able to take vacant possession of a home that is certified fit for occupation.
The National House Buyers Association is a non-profit, non-governmental, non-political organisation manned by volunteers. Our website is www.hba.org.my. E mail: info@hba.org.my
- Property Times 1st March 2003 issue -
Which also may shed the light on your next analogy
Corpbabes : Also, can I give an anology: Say in a high rise building in genting, a disaster happen due to a design defect ; Contractually we exclude design defects and say construction defects, in death or personal injury, therefore can we say that in this scenario that the project owner be liable? What if we have designer and builder ... To what extent can we pass the buck to them?
Perhaps I didn't understand the question. But somehow, I doubt that this clause (design defect) is excluded in the contract - again depending on which stage you're talking about but typically in the 'design and build' mode, it's very irregular if a contract exclude such clause cos' it is regulated in Uniformity Building By-Laws 1984 (+ The Engineers Act as well) Even if there is NO such clause, the law prevails over 'deficiency' of such clause in a contract.
Remember, when a contract doesn't favour the law (where the latter being the former's umbrella), then the law shall prevail - e.g. clause ambiguity, or 'something that should be included but excluded - yet the law states clearly that it should be included'
But alas, despite of my explanation here, you should know that ahvincent is talking about the 'ugly REALITY of the construction industry' (which I must admit..it's TRUE) and you should take his suggestions into account as well.
and corpbabes (what's your real name..or at least a short one) - don't have to apologise profusely or being humble, you should be proud to pose such difficult question amidst a topic that not many want to be participating
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