I talked about the five miseries that unfortunate owners are facing in my last blog post. In response, there were messages from readers sharing their own sad stories. It proves that Singapore really lacks a proper platform for owners and homebuyers to voice their grievances.
One of them commented that there is a 6th misery of homebuyers – poor construction quality of private residential projects built in recent years. I will cover the topic in this blog post with two real-life case studies.
Dealing with defects: BTO owners vs private homebuyers
For newly completed BTO projects, owners are not shy to show defects found inside their flat or in their block. For instance, residents of the Bidadari projects (stink from a choked waste system), Pasir Ris One, Woodlands Glen and Punggol Waterway Terraces II were upfront to talk to the local media. All building and workmanship problems are widely reported in the media.
Because HDB owners know that, after spiling the beans, the Housing & Development Board would be quick to address their complaints and rectify the problems. Futhermore, BTO homebuyers need to occupy their flats for a minimum of five years before they can sell their home in the open market.
In contrast, the private residential market is a very different story. In my first book No B.S. Guide to Property Investment, I mentioned the dilemma of homebuyers facing developer defects.
You won’t want to talk to the media for these kind of matters. Who knows whether the value of your property will drop significantly once the story leaks out (that’s much worse than a water leak!).
You don’t want to bring it up in court either. Why waste time and money hiring a lawyer? As an owner, even if you win the case, you won’t get any compensation, except for the court to order the developer to fix the defects.
You can only cross your fingers that the developer takes care of the rectifying work so that you don’t have to dig into your own pocket. After all, it is the developer’s obligation to fix all defects under the liability period of one year after the TOP date.
If that fails, and you can’t wait forever for the developer to fix the leaks, you have to solve the problem yourself so that you can finally rent out the unit. To an investor, time is money.
– Vina Ip, No B.S. Guide to Property Investment
Bad quality projects in Singapore’s prime districts
We all heard of the saying “you get what you pay for”. Do you know that this may not apply to property purchase? That how much you pay for a home can be irrelevant to what you get in return?
There are many experiences in life that, if you can afford to pay the price, you can expect good service in return. Think good food in nice restaurants or enjoyable stays in 5-star hotels.
But unfortunately, this philosophy does not apply to properties … You give them the business, you pay the price, but you can get shit in return.– Vina Ip, Behind The Scenes of The Property Market
Homebuyers generally believe that, if they pick a well-known developer, an experienced builder, and a high-end project in a prestigious district, they can minimize the chances of having any hiccup.
Well, this is not necessarily true if you have read the article “How reliable are developers?” in my new book. I have compiled over the years the list of condominiums with complaints from owners on quality issues.
Below are two real-life case studies on how things can go wrong even for projects in prime districts.
Case study #1: A District 11 project with quality issue
Perfect location
I went with my friend for a rental flat viewing in District 11. We were delighted to find an advertised unit in a perfect location – 6 minutes’ walk to a big shopping mall and 9 minutes’ walk to the MRT station.
Best still, it was away from the main road on a quiet street, with nice residential blocks on both sides. My friend loved the privacy of this smaller project with less than a hundred units. From the outside, it was a modern-looking building. The condominium just obtained its TOP five years ago.
Crap quality
However, we were totally shocked by the condition of the unit: There were already hairlines on the walls. Paints were fading from the doors and the door locks were of low quality. If I were the owner, I would definitely repaint them and polish the floor before putting it on the rental market again.
More surprises awaited us when we stepped outside to see the pool and other facilities. Everywhere showed signs of wear and tear. Not sure whether it’s the problem of the paint or cement. But I noticed some cracks on the exterior walls that should only be seen in buildings much older in age. I have bought private homes that were around 20-year-old. But this 5-year-old project was worse in terms of maintenance.
Later when I googled for the project, there were two google reviews. Both gave a rating of 5 out of 5. Nonetheless, one of them did mention the problems of power tripping, water leakage and termite infection.
This freehold project was not selling cheap when it was launched in 2011. Buyers paid $2,100 to above $2,200 psf (though prices have come down to around $1,900 psf now). Back in 2011, the developer was still a 3-year-old boutique developer. Today, it claimed that it has already built over 20 projects in Singapore.
Case study #2: A District 9 project with quality issue
Serious leakage from the ceiling
Last August, I received a very long e-mail from a reader who stayed in a two-year-old big condominium project located in District 9.
The nightmare began on a Sunday morning when his unit was flooded with water. There was heavy leakage of water from different parts of the ceiling in the living and dining room. He found that the source of the leakage was the rusty water tank that was damaged with a bulge in the middle.
With water slowly flowing into the switchboard, he had no choice but to switch off the power. Even so, the security guard refused to help him turn off the water supply of his unit. Soon water flowed into the hallways and leaked into a neighbour’s unit downstairs.
It turned out to be a big repair project for the owner that included replacing the water tank, repairing the false ceiling and repainting all the walls. For the affected unit directly below, he had to fix the neighbour’s lights and repaint the walls.
With the extent of the damage, he had to go ahead with the repair work with money from his own pocket, while waiting for a reply from the developer.
Response from the developer and authorities
To the victim, a water tank burst in a 2-year-old unit was no doubt a developer defect. He asked for explanations and compensation. However, the developer claimed that they are not liable for any damage since the condominium was over the one-year warranty period.
When he complained to REDAS (Real Estate Developers’ Association of Singapore), he was advised to pay a fee to the Singapore Meditation Centre first for the latter to address the case. When he contacted the Building and Construction Authority (BCA), it simply referred him to other third-party organizations.
I am not saying that it is all the developers’ fault. The percentage of problem cases may be small compared with the projects they have built. To be fair, sometimes it is the supplier, the contractor or the architect who gets the developer into trouble.
Nonetheless, the best time to put a company to test is always the time when things go wrong. The most important thing to look for is the response from the developer and the way they handle the matter.
How fast did they take action? Did they live up to their promises? Did they just shrink from their responsibility and simply put the blame on others? Did they only soften their stand when the management committee puts the case in court?
– Vina Ip, No B.S. Guide to Property Investment
Project achieved highest BCA CONQUAS score
The irony is: This developer behind the project received different developer and quality awards from BCA in recent years. After all, it is an established developer armed with over three decades’ of experience building large residential projects in Singapore.
When I checked this project against the BCA CONQUAS residential building database online. Guess what? The project in question was awarded a perfect 100 percent score with a CONQUAS STAR! I also looked for the condominium’s reviews in PropertyGuru. Again, it gets a perfect 5 out of 5.
To solve this mystery, I consulted Tan Wee Kwang, founder of Absolute Inspection which was Singapore’s only certified defects company. Wee Kwang was a former Deputy Director in BCA and he was trained in CONQUAS.
CONQUAS is BCA’s building construction quality assessment system. There are points being awarded to three categories: structural works, architectural works and M&E (mechanical & electrical) works. Wee Kwang reminded me that the CONQUAS measurement is only using a sampling approach to represent the whole project.
Food for thought
BCA is doing construction quality assessment by sampling. We private homebuyers are picking good quality condominiums by chance.
Buying uncompleted properties is no different from sampling and gambling. Unlike buying resale units that what you see is what you get, purchasing off-plan units is purely based on artists’ impressions and agents’ recommendations. Homebuyers can never predict what exactly they will get until they collect the key to their unit.
Despite this, many homebuyers don’t mind raising their stakes by doing defects inspection the DIY way. They spend over a million to buy a new private home. Yet they choose to save a few hundred bucks for a professional defects inspection company to do the job. They are taking the chance that nothing will happen after twelve months. And they risk fixing both the developer defects and the damaged new renovation at their own cost. What a penny-wise-pound-foolish strategy!
(Read my earlier post “Defects inspection tips for home owners: an expert interview”)
As seen from the two case studies above, even if homebuyers don’t mind paying a premium for projects in prime districts, they can still get crap in return. If anything can go wrong, it will. And the chances are much higher than winning the jackpot in any lottery.
If you need advice on property matters or residential properties in Singapore, you can check out my personal consultation service.
My new book Behind The Scenes of The Property Market is now available for preview and order online. You can also check out my online courses.
Thanks for sharing openly the bad experience the homeowners went through buying defective newly live-in apartments. Reviews with good ratings should be taken seriously as they often represent the opposite.
Usually, the residents do not have to go to the authorities unless the MCST council refused to look into the issues or considered the affected areas are not common areas, thus the homeowners have to resolve the issues themselves.
I have one pertinent question to ask you. Why is there no after-sales service offered to homebuyers instead of leaving them to handle defects alone? Thanks.
It’s good to read online comments for reference. I notice that there are often more negative comments from tenants than owners or agents for private residential projects.
You are right that the first line of support is the MCST. Residents will go down to the management office and ask for help if there is anything broken. They have ready contacts of repairmen and suppliers. But for something big like the one in the 2nd case study, they will give you some contractor contacts and you to coordinate by yourself.
Good question on “after-sales service”. There are reasons why this word is not used in home purchase. You are buying the most expensive “product” in your life. Yet they give you only 12-month warranty after delivery.
Thanks for sharing. I have always doubted the credibility of BCA (check out their web). You article & consultation with an ex-staff confirmed my doubts.
I don’t have any personal experience dealing directly with BCA so no comment. But it’s educational to hear other people’s stories and use them for reference.
hello, I purchased your book. while I appreciate your views, the views that you portray are very negative. everything seems to be bad. surely there are good agents, developers out there? why don’t you adopt a more neutral view?
As I said in my book, I am writing for people who want to know the truth. However, the truth is often cruel and bitter. For those who can’t take it and prefer to listen to sweet lies, don’t worry, there are tons of articles out there written by the industry stakeholders and the vested media.
thanks for your reply. you mentioned that there are good agents and deals around. for a change, why not share what good transactions these are? so that people can learn from it?
Thought I have mentioned these too many times. Just checked the archive of this blog about good agents. I also dedicated a whole chapter in my first book on this topic. My ideas on good deals have all been shared in my podcasts, workshops and online courses.
I bought your second book. not the first. 😀 maybe thats why i missed it out.
appreciate if you could share the links on this blog.
Can search from the archive button on my blog’s homepage https://propertysoul.com
Paperbacks of my 1st book “No B.S. Guide to Property Investment” is out of stock. Can order the ebook from the publisher at http://aktive.com.sg/store/no-b-s-guide-to-property-investment/
Commendable timely information and great highlights to people new to the game – but 2 issues naturally arise from your discussion :- 1. Since the craps going on for donkey years, what are industry leaders and influencers doing about it except to expect consumers and buyers to wriggle in submissions and accept things as they are ? Continuously bragging about developed status and independence for 57 years without seemingly wanting to resolve and having the ability or political will to make drastic changes and improvements – to say the least, and easiest way to copy cat even half or a third of UK and Australia National Housing 10 Year Defects Rectification Warranty Sheme will go a long way towards bringing the credibility back to the stakeholders in the ministry and in the industry. 2. Anecdoctally, perhaps a lot of the people buying for investments dont bother or really care and take deep interest or note about the defects and liabilities. Especially in rising markets, there are always willing buyers to buy without blink of an eye for defects or reputation ( government continued to collect the duties and fees, even more so with ever higher turnover) to continue buying. So who cares attitude is one bit of strain staring all of us in the eye that you have left out in your discussions. Perhaps that calls for another update from you who have been so helpful.
This is like CrimeWatch. You are warned about e-commerce scams out there. You can’t wait for the authority to clean up for you. You also can’t expect everyone to be smart shoppers. But you will now be more alert whenever you shop online. For those who can afford to buy private homes, we can expect them to be at least adults with a sound mind who can be responsible for their own decisions. For homebuyers who are reckless or fail to do their due diligence, you can only let them learn from their mistakes.
The previous three times that URA’s Controller of Housing issued a “no sale licence” are:
1) MCC Land’s Sceneca Residence in 2022;
2) Kingsford’s Normanton Park in 2019; and
3) Hao Yuan’s Forestville EC in 2012.
If you plan to buy from these “no sale licence” developers, I highly recommend you to do the following:
1) Read everything about problems with these developers’ previous projects so that you are psychologically prepared.
2) Conduct mystery shopping of all their previous projects. Check the quality yourself.
3) Ask owners and home inspection specialists what really happened after their TOP and how the developer responded.
Because after project completion, it’s you, not the developer, the contractor or the agent who need to stay there.