BTO Delay CompensationWe have heard that some BTOs completion were delayed, and owners were compensated. You might be one of these owners. Will you be compensated? And how much? What cause the delays? Why so many delays?In a nutshell, COVID lor. We have the circuit breaker, a shortage of foreign labour, the closure of Malaysia border and disruptions in the supply chain. COVID really jialat. Before Covid, was all HDB BTOs deliver earlier or in time?If the answer is "No", I won't be surprised. There could be other problems such as bad weather, instability in other countries that affect our workforce and supply chain, etc. I believe that the delays were perhaps a few days or at most a few weeks, which is understandable. However, due to COVID, many BTOs were delayed for months, gaining more attention. How long considered a delay that amount to compensation?Let me illustrate with an example: A BTO sales launch in August 2017. The probable completion date (PCD) is five years later, on Sept 2022. There is a buffer for BTO completion, which is also a norm in many industries. Let's assume that you ordered something online. The expected delivery is Monday at 1 p.m. The company will state the delivery time to be between 1 – 4 p.m. A buffer time of 3 hours. If there is traffic jam and the driver arrives 2 hours later than the expected time of 1 p.m., he is not late. For BTO, the buffer period is one year. The BTO PCD is September 2022, with a one-year buffer, it will be September 2023. So, September 2023 will be the delivery procession date (DPD). If the flats are not ready by DPD, only then HDB will compensate the owners according to the length of delays. How to calculate HDB BTO delay compensation?
Following the earlier example: The BTO is completed in October 2023, one year and one month from the PCD September 2022 and one month from DPD date September 2023. BTO sales Launch Aug 2017 PCD is Sept 2022 DPD is Sept 2023 Completed date is Oct 2023 Some will state that the BTOs was delayed by more than one year. This is truth if you calculate from the PCD. But based on the contract, there will only be compensation for the delay that exceed the DPD. Formula to calculate the compensation: For each year of delay, the compensation is calculated as 70% of 10% of 60% of the new flat price. I find the formula confusing. so I came up with a simplified one. You may wish to use my formula as a reference for the amount of compensation. Please note that this is just an estimation. Compensation for every month of delay: Flat price x 0.0035 x number of months One month of delay after the DPD 2 Room of 100K - $350 3 Room of 200K - $700 4 Room of 300K - $1050 5 Room of 400K - $1400 Two months of delay after the DPD 2 Room of 100K - $700 3 Room of 200K - $1400 4 Room of 300K - $2100 5 Room of 400K - $2800 The surrounding facilitiesPrior to the COVID, the majority of BTOs were completed by the PCD. After which, the construction company will start to complete the amenities, such as the playground, fitness corner, garden, etc., before reaching the DPD date. As a result of COVID delays, many units were completed after the PCD but before the DPD. Thus, there is no compensation. Several owners moved in once their units were ready while the surrounding facilities were being constructed. Seems the owners have moved in before the DPD, there won't be any compensation. Some have argued that the BTO is consider incomplete if its surrounding amenities are not completed. Therefore, HDB shall compensate the buyers. Personally, I do agree that the owners shall be compensated. The brochure and the 3D mock-up at the HDB hub feature all these amenities. These amenities not only have an impact on the buyers' purchasing decision, they will also affect the BTO's market price. And will HDB fine the contractors for failing to deliver these facilities on time? Forget it; the penalty fees won't be in your bank account. Anyway, look at the bright side, you got your house. If you still felt 不甘愿, just think of that contractors also need to 赚 吃. Give and take lor. EDITOR'S NOTE:
0 Comments
Your comment will be posted after it is approved.
Leave a Reply. |
Details
Hi walkbies, welcome to my blog. Here we will be discussing various ways to create an efficient and safe working environment, improve work performance, and produce better outputs/results. From construction tips to arts and crafts, from Feng Shui to science, we will be covering them all. So stay with us and read on. Together, we will gain the knowledge needed to excel.
|