Developers to fund compensation scheme for residents hit by construction damage

Developers and applicants will finance a new compensation mechanism intended to provide quicker redress to residents whose properties are damaged as a result of neighbouring construction works, BusinessNow.mt can confirm.

Cabinet has approved the legal amendments required to establish the new fund, which will allow the Government to compensate affected third parties before pursuing those responsible for the damage to recover the costs.

The measure was announced by Prime Minister Robert Abela during an open Cabinet meeting marking the Government's first 100 days in office on Tuesday (today).

Under the proposed system, residents who suffer construction-related damage would therefore not have to wait for the conclusion of proceedings against the party responsible before receiving compensation.

The Government said the measure is intended to reduce bureaucracy for affected property owners and allow necessary repairs to be carried out more quickly.

Importantly, the fund will be financed by the construction industry itself, through payments made by developers and applicants to the BCA, rather than being funded solely through general Government revenue.

Dr Abela said the measure builds on other reforms introduced in the construction sector, including licensing requirements, training and the introduction of a skills card for people working on construction sites.

Further details on how contributions to the fund will be calculated, the level of compensation available and the procedure residents will need to follow to make a claim were not outlined in the Government's announcement.