The “Defect Liability Clause” in the sale and purchase agreement (SPA) states that the developer is required to repair and make good, at its own cost and expenses, any defects, shrinkage or other faults that become apparent within a period of 18 or 24 calendar months (whichever is applicable) after the delivery of vacant possession and which can be attributed to defective workmanship, materials or a failure to construct the property in accordance with the plan and description appended to the SPA within 30 days of having received written notice from the purchaser.
The second part of the clause states that the purchaser shall, at any time after the expiry of the 30-day notice, notify the developer of the cost of repairing and make good of the said defects by giving the developer a grace period of 14 days. Essentially, the following is what a buyer has to do if he finds defects in his new home:
a) List all defects in writing; take pictures of them, if possible.
b) Make sure the developer receives the defects list either by registered post or by delivery by hand with acknowledgement of receipt.
If the developer is responsive, he will do rectification work 30 days from the date of receipt. The buyer should go through the list of defects with the developer to discuss the rectification work schedule. He must also be prepared to spend time or appoint someone to be around for the appointed contractors to do their work.
If the developer is unresponsive, get a detailed quotation from a reputable independent contractor for the cost of repairing and making good the defects. Give the developer a second notice and the stipulated 14-day grace period to do the rectification work. The buyer may recover the cost (any sum) of the repair from the developer’s stakeholder lawyer after giving written notification to withhold release of the stakeholder sum the 5% of the purchase price as stated in the SPA.