What are Condominium Defects? Who Should Be Responsible? And How Can Owners Resolve Them?
Over the decades, reports of defects in private condominiums have surfaced—cracks and leaks, rotting timber, foul smells, and water ponding in common areas. Accompanying these allegations are the inevitable disputes that embroil developers, main contractors, and homeowners. Recently, authorities barred developer Kingsford Huray Development from selling units in its “Normanton Park” project until all units receive the authority’s Quality Mark (QM) seal and the development obtains its Temporary Occupation Permit (TOP). This reportedly followed complaints from angry residents about the developer’s poor workmanship in a previous project, “Kingsford Hillview Peak”.
Previously, other defect issues reported in the media included flooded staircases and rotting timber decks by the swimming pool at “The Coast” condominium in Sentosa; water leakage in the basement carpark of “Emery Point” condominium in Tanjong Katong; and plaster cracks at “Seasons Park” condominium along Yio Chu Kang Road.
The Building and Construction Authority (BCA) of Singapore stated that in 2018, the “agency handling complaints about building structural safety” received 170 instances of “quality and defects feedback from owners.” The authority did not provide data for previous years.
Experts like Chin Cheong say they have not seen a significant rise or fall in defects. However, Mr. Chin added that in recent years, some developers have hired him to document the condition of condominiums before they hand over management to the Management Corporation Strata Title (MCST). Mr. Chin is the managing director of a building inspection and surveying firm.
He handles 13 to 14 condominium cases annually for developers, contractors, MCSTs, and homeowners. He has noticed that more people approach him to investigate alleged defects during property downturns. He mentioned that when the market is good, “people don’t care about defects. They just flip the property.”
So-called defect inspection companies have also mushroomed. Homebuyers pay them to check their newly purchased units before moving in or to conduct resale research on a property before buying. Industry observers estimate that there are more than 10 such companies currently operating in Singapore. One of them, a company named “Absolute Inspection” founded in 2015, claimed to have conducted 3,000 inspections in the same year, and 4,000 in 2018.
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So… What Constitutes a Defect and Who Decides?
According to Mr. Chin, a defect occurs when a building is not constructed in accordance with codes and regulations, or when it is “not fit for its purpose.”
These defects can affect safety, functionality, and performance, as well as aesthetics. Experts say there are many reasons for defects, including architects insisting on certain materials or designs, a lack of skilled workers, or rush jobs, making it difficult to determine who is responsible.
Therefore, when homeowners discover a defect, their greatest hope is to resolve the issue in a simple and easy manner.
In Singapore, developers are responsible for any defects that appear in the unit, project, and common property for a period, typically 12 months, known as the “Defects Liability Period” (DLP).
During this period, homebuyers can report defects caused by poor workmanship or materials that do not meet the promises of the sale and purchase agreement, and have the developer rectify them at their own cost.
Although most developers and contractors will step up to resolve issues, the complexity of the problems can be an obstacle.
Davin Soh, director of the company “Defects Checks,” says: “Some defect rectifications require a lot of work (usually large-scale wall hacking), which may cause more damage to the surroundings than solving the initial defect.”
Some experts also say that homeowners raise issues that are not defined as defects. Of the complaints Mr. Chin has received, he believes about 10% to 15% are due to unrealistic expectations rather than genuine defects. As Andy Lim, managing director of property management company “Ocean IFM,” puts it: “Even a slight scratch on a marble floor” gets a complaint from an owner.
Mr. Chin from Building Appraisal mentioned another example, where someone complained that marble tiles were not as durable as expected, ignoring the clause in the agreement that the developer provided reconstituted or compressed marble, not natural stone.
Kenneth Loo, the immediate past president of the Singapore Contractors Association Ltd (SCAL), stated that it is very important during the one-year DLP for contractors and developers to be responsive to owners, manage their expectations, and educate them.
A Difficult Path to Resolution
Hiring a defect inspection company is becoming increasingly popular among homeowners. Tan Wee Kwang, founder of “Absolute Inspection,” believes that hiring his company helps to make the problem-solving process smoother.
He explains: “Our purpose is to protect their interests by identifying defects, facilitating joint inspections with developers and main contractors, followed by rectification of defects by the contractor, and handover inspections by the developer and contractor.”
But some advise caution with this practice. They argue that because the industry is unregulated, the standards to prevent those lacking professional ethics and expertise from entering are low.
Mr. Tan of “Absolute Inspection” and Mr. Soh of “Defects Checks” provided their past work experience. Mr. Tan was formerly an officer at BCA and also worked for a local contractor; Mr. Soh was a property manager for a local developer.
Identifying defect issues is the first step, but not all defects can be resolved at the time of handover or within the DLP.
Some conditions, known as “latent defects,” take time to manifest, often only becoming apparent after a period of use. If these defects are not properly rectified within the one-year period, the problem may persist.
Daniel Tay, a partner at Chan Neo legal firm, stated: “More serious defects might include the selection of wrong materials or equipment, or even severe workmanship issues, which are only discovered after some time and use, deteriorating faster than their expected lifespan.” For example, building collapse, water leakage after heavy or prolonged rain, detached tiles, rotting/discolored wood, or even underpowered air-conditioning or water pump systems.
Mr. Tay said that after the DLP, the buyer has the right to file a lawsuit for latent defects within 3 years of reasonably discovering the defect, or a general right to sue in contract for up to 6 years. However, he also pointed out that this right does not always have a clear start or end time.
It is also difficult for owners or the condominium’s management committee to pinpoint the root cause of a defect at the outset. Christopher Chuah, a lawyer at WongPartnership, noted that this, in turn, makes it difficult to determine the appropriate party to sue, whether it be the developer, architect, main contractor, or other subcontractors.
Furthermore, Steven Ong, a building surveyor at Arris Building Consultants, said that after the one-year period, developers sometimes claim that the condominium’s problems are due to wear and tear or maintenance issues.
Both developers and owners have hired building surveyors like Mr. Ong and Mr. Chin to verify the authenticity of a defect, who is liable, and to determine how to fix it.
Pursuing a case can be costly. In Mr. Chuah’s experience, taking a defect case to court can take three to four years to conclude, and legal fees can amount to S$400,000 to S$500,000, in addition to expert fees and other expenses. Mr. Tay stated that the number of affected owners and their willingness to sue, as well as the number, scope, and cost of repairing the defects, are some factors that can influence the extent of litigation.
But in all fairness, it’s not always the developer’s fault when a problem arises. Taking the cases Mr. Chin has encountered as an example, typically several years after handover, about 10% – 25% of the homes are affected by safety and functional issues or violations of operating rules, while half of the remainder are aesthetic issues that do not affect enjoyment or performance, and the other half are due to lack of maintenance and normal wear and tear.
Court Outcomes
Based on court precedents, the outcomes are not ideal for homeowners who want to take legal action.
In 2016, a court ruled in a dispute concerning the “Seaview condominium,” finding that the developer, architect, and main contractor could use the “independent contractor” defense to assume liability—meaning that as long as they exercised reasonable care in appointing independent contractors, they would not be held vicariously liable for the negligence of those independent contractors.
The court further clarified that under the Building Maintenance and Strata Management Act, MCSTs or subsidiary proprietors do not have a civil right of action against developers.
Mr. Tay from Chan Neo said: “This means that owners may have to first find the smaller party and sue them for rectification costs. But the difficulty with this is that even if the owners can prove their case in court, it may not be cost-effective in the end.”
For Mr. Chuah, this means the appropriate route for defect claims against developers is through contract under the sale and purchase agreement, rather than suing for negligence.
Anecdotal evidence suggests that many owners end up resolving issues privately through mediation.
The Singapore Mediation Centre (SMC) told The Business Times (BT) that mediation can produce more “creative” settlements than direct compensation for damages or going to court.
The SMC cited one case where, when the disputing parties could not agree on what constituted a satisfactory rectification, they agreed to draw lots to select an independent surveyor to oversee some of the rectification works.
Back to Basics
For developers and contractors, poor quality can lead to a damaged reputation. Mr. Loo of SCAL said: “No contractor in their right mind would want to do a bad job in this industry unless you’re planning to close down tomorrow.” Furthermore, he added, for a contractor, the cost of fixing a defect is often higher than doing it right the first time.
How to Further Reduce the Occurrence of Defects?
As Mr. Tan of “Absolute Inspection” said: “In the construction of a building, time, cost, and quality are usually key elements that must be carefully controlled and balanced to ensure the building’s quality is acceptable and can be completed within the submitted schedule and budget.”
Therefore, focusing only on low cost or being limited to the project budget and a faster completion time often means compromising on the quality of workmanship. Developers and contractors seem to vary in how they handle these three aspects.
One contractor told BT that some developers just want it cheap and “don’t mind suboptimal work.”
On the other hand, other developers focus more on quality. Ong Choon Fah, CEO of Edmund Tie & Company, said that some developers document past mistakes and learn from them, realizing that quality can enhance their brand. She said: “They are not just trying to sell a development, they are also building relationships.”
Professor Low Sui Pheng from the Department of Architecture, School of Design and Environment at the National University of Singapore (NUS), gave an example of some developers having their own representatives, project management teams, and on-site consultants to ensure quality standards are maintained throughout the construction process.
But some believe that the conditions in the construction industry may be a contributing factor to defects.
Mr. Tay of “Chan Neo” stated: “The construction industry has been underperforming for the past few years, hit hard by high rates of delinquent bills. Since cash flow is the lifeblood of the industry, this could have the biggest impact on local SMEs, who may be partially paid or paid with a delay of 90 days or more.”
He has heard some smaller contractors say that due to seemingly more intense bidding competition, they may have to bid at or below cost, especially for lower-tier contracts.
He said that the end result is reduced labor, use of cheap raw materials, or using cheaper subcontractors who cut corners.
Others point out that the labor-intensive industry needs to improve its processes. Mr. Ong of “Arris'” said: “Usually, it’s either your craftsmen are unskilled, or the work is rushed to meet a deadline. And it’s not checked by more professional people.”
Others noted that Singapore needs more skilled craftsmen, for example, workers who can perform better carpentry work.
Mr. Loo of SCAL stated that more could be done to allow more experienced foreign tradesmen to stay in Singapore longer, including lowering tariffs, to improve the skill level of the local workforce.
Professor Low said that the construction industry needs to get rid of a “not my problem” attitude. He referred to a letter in The Straits Times forum in 2015, where the author claimed that the marble tiles installed in her apartment’s bathroom could cause falls.
He said: “From drawing to construction, I believe many people must have seen it. But why did no one raise this issue? This kind of concern and attitude is what we need to cultivate.”
Solutions
Some experts suggest that one solution for the construction industry could be to adopt off-site construction methods, such as Prefabricated Prefinished Volumetric Construction (PPVC), as it allows for construction in a controlled environment.
The newly completed condominium, Clement Canopy, is now the world’s tallest concrete development built using PPVC technology. Dragages Singapore, a subsidiary of Bouygues Bâtiment International, was responsible for its construction. The company’s CEO, Pierre-Eric Saint André, said: “You can see everything standing on the ground, and once there’s a defect, you can correct it.” But he noted: “Currently, modular construction is not cheaper than traditional construction, but the goal is to make it cheaper.”
For homeowners, experts advise them to take action as soon as they see a defect. One reason is that waiting makes it harder for professionals like Mr. Chin to find the cause. Mr. Chin explained: “It’s like an autopsy. If you come four or five years later, you have to piece together all the puzzles and all the information, otherwise, you won’t find anything.”
Ensuring Quality Control Measures are in Place
While conflicts may arise over the definition of housing defects and liability, the BCA has established two schemes to promote good workmanship before the keys fall into the hands of homeowners.
Under the Construction Quality Assessment System (Conquas) scheme, BCA officers assess structural, mechanical, and engineering, as well as architectural works, on a scale of 100, with scores given based on the percentage of inspected items that meet the standard.
An independent and voluntary scheme is the QM, which assesses the finishing of the building.
Conquas is a mandatory assessment for public building projects and new buildings constructed on Government Land Sales (GLS) program sites. A BCA spokesperson said that over the past 3 years, 95% of private residential and commercial developments have used Conquas.
According to public data, Conquas scores seem to have improved over time. In 2018, about half of the 177 projects rated scored 90.1 or higher. In 2011, only 29% of the 139 projects surveyed achieved these scores.
But Conquas has its limitations. It is based on a sampling method, with an average of one in four units tested, and it only studies workmanship, not design and material issues.
However, although QM is limited to internal architectural finishes, it assesses every unit in the condominium. By number of residential units, the participation rate in QM testing over the past three years was 52%.
BCA stated that according to a survey of homeowners conducted by an independent consultant in 2017, QM properties had 50% fewer defects compared to properties not inspected by QM or Conquas.
A study pointed out that there is a strong relationship between building quality and the selling price of new homes and their appreciation rates.
A paper published by the National University of Singapore (NUS) in 2014 found that among the 100,593 condominium unit transactions in 205 developments completed between 1998 and 2010 that they studied, every one-standard-deviation increase in Conquas score raised the average residential selling price by 2.92%.
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