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Construction Law/Extension of Defect Liability Period

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Question
Dear Peter, may you ans my question?

Giving a situation, A developer company entered contract with Contractor Company to construct 50 units of bungalows. Under building contract, both parties agreed the Defect Liability Period is twelve (12) months. During the construction period, the developer changed his mind extended the defect liability period from twelve (12) months to thirty-six (36) months. Reason of extend the defect liability period is the developer initiative to boost his property sales. At the same time, government has also gazette such new statutory requirement for all developers to implement immediately. Question is in order to ensure a better quality of works, how the contractor going to demand for thirty percent (30%) or RM 750,000.00 increase on the construction cost from the client. Ans can be based on JTC Standard Building Form
of Contract, PAM 2006 (with quantity)form, and/or PWD 203A form of Contract.
Question 1: What may be the reasons of Government gazette new statutory requirement of extend the Defect Liability Period (DLP)?

Question 2: What should Contractor respond upon government gazette such new statutory requirement and why?

Question 3: What are the effects after defect liability period extend from twelve (12) months to thirty-six (36) months?

Question 4: After comply the new statutory requirement, if Contractor feel his risk taken extended and/or have to extend warranty of equipment, can he/she claim for such additional cost? if so, how he/she claim for it?

Question 5: Is that any case law before similar to such situation?

Answer
Dear Alvin,

I have no knowledge or experience of  JTC Standard Building Form of Contract, PAM 2006 (with quantity)form, and/or PWD 203A form of Contract, so my answer will be based on FIDIC 99.  

q1. Desire for increased protection of consumers (house buyers) due to defects appearing after 12 month Defect Liability Period, following a series of complaints against contractors;

q2. Contractor should obey and follow the law as this is a requirement of all civilised societies;

q3. Greater attention to quality by contractors and increased prosecution of contractors in the years immediately following the change in law

q4.  Calculate the increased risk, perhaps based on increased insurance premiums, and claim for the increased costs through the clause covering changes in legislation after the Contract has been signed.

q5.  I have no knowledge of any relevant case law, but you could try googling the subject.

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Peter M. Elliott

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First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol www.eotprotocol.com before submitting a question.

Experience

Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Organizations
Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

Education/Credentials
B Sc(Hons) in Civil Engineering

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