Defects of Common Property

Question

In the Strata Management Handbook, page 26 of STEP 9, ‘It is the duty and responsibility of developer to rectify the common property defects for 2 years from the date of the 1st vacant possession of a parcel.

I bought a unit recently where the project is competed 3 years ago, is this means that I still have 2 years (based on VP date) to inform developer if there is any defects?

But somehow the Common Property Defects Account, (for developer to utilize carrying out any works) is only last for the first 2 years. I’m quite confused here then.

Answer

As you have purchased a completed property, any warranty on defect be it be for the parcel unit or the common property, will depend on the terms of the sales and purchase agreement (SPA) that you have signed.

For a completed property, the SPA is not the Schedule H Sales & Purchase Agreement as contained in the Housing Development Act.

If it is under the Schedule H Sales & Purchase Agreement, the defect liability period is 24 months from the date of vacant possession of the parcel unit. As stated, defects to the unit or the building or the common property that are due to defective workmanship or materials, then the developer shall repair at its own cost and expense. If the defect has not been made good by the developer, the purchaser shall be entitled to carry out the works to repair and make good such defect himself and to recover from the developer the costs of repairing and making good the same and the purchaser may deduct such costs from any sum which has been held by the developer’s solicitors as stakeholders under item 5 of the Third Schedule of the schedule H sales and purchase agreement.

From 1 June 2015, developer needs to establish a Common Property Defects Account with the Commissioner of Building (COB) upon the handing over of vacant possession and whereby the developer is required to place a deposit of not less than 0.5% of the estimated costs of construction or RM50,000, whichever is higher. This account will expire at the end of the defect liability period, which is 24 months as prescribed in the Schedule H SPA [Section 92(5), Strata Management Act].

However, for a non-Schedule H SPA, the rectification of defects in the common property will depending on the terms and conditions stated in the SPA (whether developer is liable for rectifying the defects of the common property or not). However it is unlikely that the developer will be liable and/or responsible for any defects in the common property, more so that the property was completed 3 years before you made the purchase.

Ref: REHDA Institute @ 6 Jun 2018