Council welcomes Covid-19 Act

PETALING JAYA (Nov 14): The Building Industry Presidents’ Council (BIPC) has stated that it welcomes the enforcement of the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 [Covid-19 Act].

In a statement yesterday, BIPC said that the Covid-19 outbreak had disrupted building projects due to “Movement Control Orders, Conditional Movement Orders, as well as the Standard Operating Procedures [SOPs] implemented thereafter” and “escalated costs arising from prolongation of projects and costs of compliance with the necessary SOPs”.

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The council said “it is good” that the Covid-19 Act has temporarily suspended “contractual rights under Part 2 of the Act in order to allow all parties to review their respective positions and consider the best way to move forward”.

“Specific provisions for the Housing Development (Control and Licensing) Act 1966 (HDA) are introduced to address the inability to perform the obligations by the developer and the purchasers under the pandemic,” it added.

Still, BIPC also felt that the act will not be able to tackle all the issues encountered by the building industry.

“For example, the Covid-19 Act has now extended the defects liability period [DLP] from March 18, 2020 to end of the year 2020 in favour of purchasers under HDA, thereby increasing the potential rectification costs faced by developers, despite there being no similar extension in respect of DLP in the main building contracts.

“While BIPC welcomes the provision under the Covid-19 Act for disputes to be resolved by mediation, the process in certain instances could be lengthy and costly,” explained the council.

BIPC therefore “encourages all contracting parties to approach all ongoing projects with a fresh mindset by looking at how best to preserve each party’s interests as opposed to insisting on strict contractual rights”.

BIPC is made up of Association of Consulting Engineers Malaysia (ACEM), Institution of Engineers, Malaysia (IEM); Malaysian Institute of Planners (MIP); Master Builders Association Malaysia (MBAM); Pertubuhan Akitek Malaysia (PAM); Real Estate and Housing Developers Association Malaysia (REHDA); and Royal Institution of Surveyors Malaysia (RISM).

“Extraordinary situations call for extraordinary measures and responses. This Covid-19 pandemic is such. ACEM supports all initiatives by the Government and Professional and Trade Associations for dispute resolutions that allows for the common survival and accelerated recovery of our businesses and industries for the good of the nation and the people and the world,” said ACEM president Datuk Mohd Adnan Mohd Nor.

“All the seven members of BIPC agree that the building industry players and contracting parties should look into resolving issues amicably for the interests of all parties rather than insisting on strict contractual rights of any party. In line with the Covid-19 Act, PAM provides mediation services at PAM Centre for contracting parties to resolve any disputes in their projects.

“We also hope all architects to play active roles in facilitating parties to explore possibilities for solving contractual issues without going into a dispute,” said PAM president Datuk Ezumi Harzani Ismail.

“RISM agrees that the construction industry parties need to take more proactive roles especially during this pandemic dealing with disputes. Recently, RISM launched the revised Arbitration Rules during our AGM for qualified members to register with us as panellists. Industry can make use of the empanelled RISM ADR panellists in any dispute related matters,” said RISM president Datuk Thiruselvam Arumugam.   

“We urge all parties to use their common sense and come up with a commercial decision to settle their issues, because losses due to COVID-19 is no fault of either party. We also hope that all involved parties including developers, contractors and homebuyers will not use the law to take advantage of each other,” said REHDA president Datuk Soam Heng Choon.

“MBAM would like to call for contract administrators and superintending officers to take a pro-active role in helping to resolve contractual conflicts and disputes arising from the pandemic. Contractual rights are important when it comes to dispute resolution, but it is not the ideal approach to manage ongoing business relationships.

“Hopefully as an industry, all of us can think more about ourinterests as opposed to our rights, especially in our contractual relationships,” said MBAM president Foo Chek Lee.

“BIPC’s contribution in easing contractual dispute during the global pandemic is a much-needed effort to boost the building industry,” said MIP president Hj Ihsan Zainal Mokhtar.

“This pandemic is disastrous to the economy and livelihood of many. While we stay safe and healthy but struggle to sustain, let’s forge ahead with a mindset change for a new horizon which is beyond our norms in the ways we live, work and do business,” said IEM president Ong Ching Loon.

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