MDA says new construction damage compensation scheme must work for owners and remain fair to developers

The Malta Development Association (MDA) has welcomed a new scheme announced by the Government, aimed at assisting property owners who suffer damages as a result of nearby construction works.

The MDA said the scheme must work for affected property owners while remaining fair to responsible developers, building contractors and applicants.

The scheme in question is to be administered by the Building and Construction Authority (BCA) and funded through fees and contributions paid by developers, building contractors and applicants to the BCA. It is intended to provide quicker redress to residents whose properties are damaged as a result of neighbouring construction works.

Cabinet had approved the legal amendments required to establish the new fund last week. It was a pledge in the Labour Party’s electoral manifesto, and follows public incidents over the years where third party properties were damaged while works took place on neighbouring sites.

It will allow the Government to compensate affected third parties before pursuing those responsible for the damage to recover the costs. But the Government’s announcement did not include 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.

Regarding the fees and contributions to be paid to the BCA, the MDA said that these charges must be clearly defined, proportionate and used for the compensation mechanism and its related costs.

“Property owners who suffer genuine construction damage should have a faster and more effective route to compensation, without being forced into lengthy and costly legal proceedings. At the same time, responsibility for damage must be properly established and those funding the scheme must be treated fairly.”

The MDA also welcomed the proposed assistance by the BCA to affected property owners pursuing claims where responsibility for damage is established. The rules should set out clear procedures for assessing damage, deciding claims and resolving disputes, the MDA said.

The MDA said that it looks forward to reviewing the scheme’s legal and administrative details and continuing its discussions with the Government and the BCA.