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Sat 13 Nov 2010 12:00 AM

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Why buy the 'cat in the sack'?

Christiane Murray explains the importance of having a ready-for-handover property snagged

Why buy the 'cat in the sack'?

A thoroughly ‘snagged’ property will give any property buyer confidence to know the actual state of the unit he or she has bought.

The real advantage of having a property snagged by a third party is a clear and unbiased picture of the built quality of any kind of development, be it residential or commercial. Individual investors have discovered there are professional companies in the market offering this service instead of doing this tedious exercise themselves, without really knowing what and how to test and inspect a new property. The service of a detailed report, accompanied by photographs and also suggestions for remedy is offered by a handful of professionals in the market and they are getting quite busy these days with nearly 3,000 properties a month being released onto the market.

The snagging report will serve as a tool to take up communication with the developer to have the issues listed rectified in a very short period of time after handover, in order to have it ready for occupancy.

Once a property is ready and accepted by the owner for occupancy, the developer can make use of the DLP (Defects Liability Period) time of up to one year to work on the remaining minor issues until being released.

Some facts: Our inspectors find an average number of 100 to 150 snags per property in a typical three to four bedroom villa. Those snags can be structural, design or functional in nature. Our aim is to have 60% to 70% of those snags rectified within the first four to six weeks after the initial snagging has been performed.

What does this say about the built quality of new properties?

It may indicate that a developer does not perform proper final quality checks or, materials used are not of a good quality. Sometimes, design changes are made midway into construction without being evaluated holistically and these may affect other materials/installations negatively.

I could go on to list more potential challenges, but they all lead to two obvious questions: Why do developers bully the clients to accepting the developer’s snagging reports? Why aren’t developers hiring or co-operating with independent third party snagging professionals to show their clientele that they indeed deliver quality and are not shy of having an independent party checking/reporting on it?

It would not only be beneficial for developers in the long term, it would also show an openness and transparency, which demonstrates investors are being taken seriously.

It would definitely help to regain the confidence of owners and future investors in developers by being transparent and content that they deliver as promised and per the conditions laid out in their SPA’s (Sales and Purchase Agreements).

The current phenomenon is that most developers – already being extremely delayed to handover – are pressing owners to ‘pay up’ as quickly as possible, allowing them only a small window of time for snagging on an A4 snag template designed by the developer. This creates insecurities and even suspicion on the owner’s side, especially when they are not residing in the country and rely completely on phone and email correspondence.

We know of cases where owners have clubbed together and are preparing and filing for dispute resolutions because developers are not forthcoming and supportive at all in their handover processes.

This pressure and negativity could be eliminated immediately if developers would show trust and confidence in their own developments by proactively supporting their investors during the handover process. Unfortunately, sub-contractors of developers are facing tough times as well, so cutting corners in delivering quality finishes of simple paint, carpentry or masonry work become a major concern.

To summarise: unless the owner contracts a third party snagging inspector, he or she will not get a really good picture of the property.

Up until then, an owner is not really aware if all SPA conditions are met i.e. size of the property, if the build quality and finishes are up to standard, if the white goods are of good quality, if the tiles are really from Italy and not of a cheap make from a local market, if the walls are dry etc, but most importantly, if the property is actually ready for occupancy.

If developers would only allow third party snagging inspectors on site even before an owner has ‘paid up’, it would open a much more professional and mature way of dealing with the potential challenges on hand without going down the legal path, which will only contribute to harden the positions of all parties involved.

Bio

With 12 plus years in the Middle East market, Murray advises Landmark Properties clients on best practice and standards related to projects in both new and existing developments. She is also an expert on strata law and a consultant on its legal requirements.

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