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SINGAPORE – A law passed in Parliament on Tuesday (November 3) will provide a universal four-month extension for construction projects to be completed, including built-to-order flats.
It will also allow property buyers who incur out-of-pocket expenses due to construction delays, such as renting a place to stay, to seek reimbursement from developers, including the Housing and Development Board (HDB).
Contractors will also have to share 50% of additional non-labor costs, such as equipment rental and material storage, with their subcontractors and suppliers, with a monthly cap of 0.2% of the amount of the contract.
The total amount claimed is capped at 1.8% of the contract value.
Parliament approved these support measures for the built environment sector under the third set of amendments to the Covid-19 Act (Temporary Measures).
National Development Minister Desmond Lee said the measures will provide more support to the construction industry and ensure that the pains caused by the pandemic are shared among contractors, developers and buyers.
The four-month universal extension to construction project deadlines explains the delay in works due to Covid-19 restrictions in the first half of this year, he added.
Construction works were forced to come to a standstill for the first time between April 7 and June 1 during the breaker period, and for at least another two months as the dormitories housing migrant workers were only cleared in August, noted during the discussion on the draft amendment.
“This universal extension of time will reduce the administrative burden on contractors so they can focus on restarting and speeding up work quickly and safely,” said Mr. Lee.
Contractors will also be able to avoid paying damages under their contracts for delays between February 1 this year and March 31 next year by sending a repair notice to the developer.
Developers, including HDB, would also have a similar four-month extension to the delivery date for housing, commercial and industrial property under the measures, he said.
This extension would only cover contracts entered into before March 25 and in which the developer was required to deliver the property to the buyer on or after February 1.
The first permit to carry out structural works by the property’s Building Control Commissioner must also have been issued before April 7, and the Temporary Occupancy Permit must not have been granted after April 7.
Developers needing an extension of more than four months will need to seek an advisor appointed by the Ministry of Law (MinLaw) to determine if the additional delay was materially caused by the Covid-19 pandemic.
Additionally, home and property buyers who incur out-of-pocket costs due to delays could request reimbursement from the developers for up to 70 percent of the liquidated damages payable in the purchase agreement.
For HDB floors, the prescribed settled formula would be 10 percent per annum of 60 percent of the new fixed price.
Property buyers and developers who disagree on the rebate amount can go to a MinLaw-appointed advisor to make the final decision.
Contractors who have to share additional non-labor costs could claim these costs through their regular progressive payments.
If there are disputes, contractors can submit an award application under the Construction and Building Industry Payment Security (Sopa) Act.
The Sopa adjudicators will determine if relief applies and the amount of co-participation between the parties.
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