In a dispute over construction quality, a property developer may need to carry out maintenance work on the building in question during the course of legal proceedings. The way in which the developer handles the work may have a direct influence on the final outcome of a case. Moreover, in order to best position themselves in anticipated legal proceedings, property owners have been known to identify quality problems with a building, ask the developer of the building to carry out maintenance work, and then institute legal proceedings suddenly and unexpectedly during the maintenance. They think when the judges see a site which is extremely messy due to the maintenance work, they will have the impression that there really is a quality problem, and will be more likely to make a judgment in the owner’s favour.
Judges’ direction advantageous
In such a situation, a developer should request that the judges direct it to complete the maintenance work to the building in question before the hearings close. (Such a decision must be clearly stated in the trial records.) Making such a request has the following three objectives.
Senior partner
Dacheng Law Offices
Firstly, making such a request may minimize loss to the property owner and reduce the indemnity liability of the property developer. Whether the quality problem has a direct impact on the occupancy of the property by its owner or whether it has been identified prior to occupancy, the developer should fix the building in question as soon as possible to restore it to a state of normal use, in order to prevent further claims by the owner for subsequent losses, and to minimize the indemnity liability of the developer. This is especially important in disputes over quality that are likely to lead to any delay in the delivery of the property by the developers.
Secondly, making such a request may influence the process of establishment of evidence by judges. Property owners can tend to exaggerate quality problems in buildings, and the resulting losses. However, if a property developer fixes the building in question quickly or even proves, from a technical or engineering point of view, that no such quality problem exists, this may help to lead the judge ultimately to find in favour of the developer. This is especially the case if a number of property owners all take legal action against a single landlord.
Thirdly, making such a request may reduce the pressure on the judges to find against the developer. If a building has not been in a state of normal use, the judges will encounter greater pressure to find in favour of the owners. Conversely, if the developer speedily repairs the property that is the subject of the dispute, it may be more likely to obtain a favourable judgment.
Points to bear in mind
A developer should make relevant preparations prior to a maintenance project. Firstly, it should make sure that the keys to the building in question are kept safely. If the owner has not yet occupied the building, the developer may keep the keys on the owner’s behalf, in order to ensure that the maintenance project can proceed smoothly. However, if the owner has already occupied the building, the developer should not keep or use the keys, so as to prevent any dispute arising from any loss of or damage to items in the building. Secondly, the developer should ask the owner to vacate the building prior to any maintenance works. If the owner refuses or is unable to do so, all fixtures should be sealed and the maintenance work should be carried out in the presence of the developer, owner and property management staff.
During maintenance work, a developer should firstly document the work carried out and its results, and keep written or video evidence. It should ask property management personnel to be present at the site and must document, in writing, the start time, end time, details of work, amount of work, and reasons for any failure to carry out specified maintenance in respect of each maintenance project. It should take photographs of the site and ask the owner to sign both the documentation and the photographs as confirmation. If the owners refuse to do so, the developer should ask the property management personnel to sign.
Secondly, developers should carry out maintenance works in strict compliance with judges’ decisions as contained in trial transcripts, and must not carry out repairs that are outside that scope. If, during maintenance, the property owner asks the developers to carry out repairs which are out of the scope, the developer should ask the owner to make such a request in writing and should charge separately for such repairs. Even so, the performance of any extra work may lead to the emergence of new problems and thus give the judges the impression that there might be further quality problems affecting the property.
Dealing with complaints
If a property owner complains to the customer service officer of a developer about a quality issue, the officer should be careful not rush to respond to the complaint. Instead, he should try to understand the situation in detail and report the complaint to the company’s management as soon as possible. The company’s engineering, legal and customer service staff should discuss the complaint together in order to identify the facts and work out a solution. Finally, they should seek to resolve the matter through negotiation with the owner.
Customer service officers should be careful about their “dual role” in the management of a dispute. Before a dispute occurs, their main role is to provide service to the property owner. When a dispute has occurred, the customer service officer must act as a representative of the developer in the management of the dispute. Customer service officers should not try to solve the problem themselves. They should treat the owner with courtesy and should not debate or argue, so as to avoid aggravating the conflict and even giving the owners a further reason for complaint. Where legal proceedings have commenced, they should act in strict compliance with the requirements of trial transcripts during any mandated maintenance works, and should not blindly act upon the requests of the owner.
Carrying out maintenance works during legal proceedings requires all departments of a property developer to act in a coordinated manner and in strict compliance with procedures. Doing so will increase the chances of a favourable verdict.
Mr Dennis Deng, a senior partner of Dacheng Law Offices, specializes in foreign direct investment, M&A, real estate & construction, litigation and arbitration.
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