Poor building quality holds back buyers

By Ng Jia Xiang

The Sabah media hailed it a success. In three days, a recent exhibition in Kota Kinabalu sold 500m ringgit ($147m) worth of buildings. But at closer look, the sales offered little cheer. More than three-quarters of the 2.2-billion-ringgit properties were unsold. Of those sold, 50m ringgit was for buildings in Kuala Lumpur. And this should worry the real estate industry because faulty construction is holding back buyers.

Yet Susan Wong Siew Guen, president of the Sabah Housing and Real Estate Developers Association (Shareda), boasted that the sales exceeded her association’s target. How that could be defies business sense and logic. Next she complained that the exhibition was too short. Perhaps an extra day would better sales, she said. But could just one more day help sell most of the 2.2 billion worth of properties?

Most exhibitors agreed that there was no lack of interest despite a global recession. Cheap housing loans at discounts of as much as one-third of the 5.5% base lending rate of most banks are begging borrowers. Banks bear all loan costs such as legal fees and stamp duties. But what has held buyers back is the poor quality of construction because builders cut corners by using sub-standard materials and poorly supervised unskilled workers. Exhibitors said questions asked at the Shareda Propex'09 centred on quality assurance and the safety of buildings.

An irate foreigner who has made Sabah his home complained bitterly of serious defects in his house which he bought three years ago to take advantage of government incentives of the Malaysia My Second Home (MM2H) scheme.

“Do something about the shameful construction quality, huge numbers of defects, unskilled, unsupervised labour and lousy materials,” he said in a letter to the local Daily Express newspaper last month. “As an MM2H homebuyer, I experienced close to a hundred defects in one year in an expensive brand new house. Now, three years on, serious and costly defects are still emerging.”

Architects and civil engineers acknowledge that many buildings in Sabah are unsafe for living. But they put the blame on “non-Sabah based (architectural and engineering) consultants” for their disregard of the local building industry’s bad work culture and shortcomings in site supervision.

Miss Wong however is defensive of her industry. She tells Insight Sabah that Sabah’s builders score between 70% and 75% in quality assessment. “Some have even reached 85%,” she says, adding that her industry is aiming at zero defects.

To this Ho Jia Lit, chairman of the Sabah chapter of the Malaysian Institute of Architects, retorts: “Please put the money where your mouth is. If Shareda is serious about reducing building defects, please allocate more money for site supervision.”

Mr Ho blames real estate developers for the building faults because of their reluctance to pay well qualified clerks of works to supervise construction to ensure standards are met. He is joined by Joe Chow Wai Ming, Sabah branch chairman of the Association of Consulting Engineers of Malaysia. 

Most settle for the cheapest at salaries of between 1,500 and 2,500 ringgit a month. A civil engineer or a resident architect doing this work would ask for more than 5,000 ringgit. “The salary for a well qualified clerk of works is only a small part of the project costs,” Mr Ho says. “If the developer is willing to pay good money for expertise, I’m sure the construction work would be good.”

There are no laws that mandate the employment of a clerk of works or site supervisor. Developers thus take the easy way out. Compounding the problem is that developers employ contractors to build and they in turn hire contractors who give the job to other contractors. Thus it is easy to see how profits are diluted down the line and why the last contractor carrying out the work has to cut corners to earn his money.

Mr Chow says there are a thousand ways a developer or contractor can cheat house buyers. “If the work costs 100 ringgit and a contractor is willing to do it for 60 ringgit. How is he going to make money?” he asks. “The developer must know that he can’t always go for cheap. But in this business, everybody wants to save costs and make a lot of money. There must be a benchmark for awarding contracts.”

This also raises the question of who should supervise construction. Mr Ho says the responsibility is passed down the line and so, in the end, nobody supervises it. The last contractor may reluctantly employ a clerk of works who takes orders from him.

Ideally, Mr Ho says, the construction should be supervised by the project consultant who will employ a clerk of works for the job to ensure that specifications are met. The developer would then reimburse the consultant his salary. But developers shy away from this arrangement while consultants do not want to take on an extra responsibility.

So what can house buyers do? Nothing much until the laws are changed to hold developers liable for defects for longer than 18 months. But for a fee of about 2,000 ringgit, an independent property inspection service (PIS) of the Architect Centre may help them avoid the mistake of buying a defective building. The service was intended for buyers of second-hand houses but it has been extended to new buildings. Those who have just bought defective buildings may ask PIS to inspect them with a view of taking developers to court. Indeed Mr Ho says that the PIS findings on houses at Taman Bukit Saujana in Kota Kinabalu are being used as evidence by 80 house owners in a lawsuit against their housing developer. He says foreigners making Sabah their second home should make use of this service before buying a house. – Insight Sabah