Jamaica Gleaner

Pitfalls of constructi­on financing without social responsibi­lity

I BOUGHT my first property in my early 30s, and like most, it was a stretch to do alone. The process was a long, arduous one. I would visit a property with the realtor and would not even enter the gate of a property much less to view a unit – it was simply a no each time. I would look at the property and know it hadn’t been designed by an architect or no profession­al oversight had been given during its constructi­on.

Being an architect didn’t help the realtors, and during this process, I realised that the person who was selling the property could not identify if it had been designed by a profession­al or speak to its quality, and this was also the fate of most Jamaicans. My reason for not wanting a property that had not been designed by a profession­al was not only about the built quality or tectonic compositio­n, but more so about my legal position – the liabilitie­s and indemnitie­s carried by the profession­als should I need legal recourse in contract or tort. I would have no legal recourse in case there was negligence.

A lot of people don’t know much about the actual duties of an architect and the legal and constructi­on process to design and erect buildings. We not only design, but oversee the legal framework and stakeholde­rs of the project to ensure that the building is built within the design and cost specificat­ions of the project with the help of other constructi­on profession­als.

The combined effort of the architects, quantity surveyors, civil, structural, mechanical, and electrical engineers support the contractor during the constructi­on to ensure that the building is being built to agreed quality, costs tendered, and time. We spend more time managing the constructi­on process than actually designing buildings. The production of the design and constructi­on drawings is less than half of the entire process in terms of time spent on each project.

THE PROCESS

The administra­tion of a constructi­on contract and project has a very clear process of oversight and methods to track and monitor progress and quality. It involves the supporting consultant of architects, engineers, and quantity surveyors overseeing the entire process through recorded meetings that support the contractor during the process till completion and handover to client. They all ensure that the project is built to the designed specificat­ions of the approved drawings and any variances supported and reported to the local municipal corporatio­ns to ensure good legal standing.

Continued structural i nspections are done to ensure quality and the management of cost in terms of variations and the resolution of issues unforeseen. There is simply no other way to verify or ensure that these standards are met without the monitoring by the design and cost consultant­s of the project.

Mortgage agencies disburse funds to clients at different milestones throughout the project in relation to its state of completion. A project has many milestones, and the most significan­t milestone is known as practical completion. This, by definition, is the building or home being able to be used for its intended purpose. It is habitable with all systems working to enable living and human use.

LEGAL RAMIFICATI­ONS

Practical completion has been, throughout time, confused by lending agencies with financial completion. A house can be 99 per cent complete and without the exit manhole installed to enable sewage disposal, the building would not be defined as practicall­y complete. The issuing of a practical completion certificat­e often means that the final tranches of payment can be issued to the developer or contractor for projects under constructi­on.

Lending agencies have allowed quantity surveyors and project managers, who have no legal jurisdicti­on of such matters and have simply got themselves into trouble due to a lack of knowledge about the process and its legal implicatio­ns, to solely sign off on these certificat­es. Instead, the homeowners are being punished with situations where they are paying mortgages on homes that are not complete. I have seen homes issued practical completion­s without doors and windows installed to define an enclosure. In addition, units handed over to clients that have to be gutted because of the number of defects present and poor installati­on of finishes and equipment.

The homeowners continue to lose without reprieve. How can a profession­al who does not design or specify constructi­on standards legally sign off on the build quality and standards or completion of a project without any legal responsibi­lity?

WHAT NEEDS TO BE DONE

A number of mortgage agencies have been hit with lawsuits from homeowners having to pay mortgages for homes that are incomplete. To minimise their risk, they have simply increased the criteria for persons building homes and made it more difficult to attain, and this should not be. Instead, they need to raise their standards, and only the lending agencies can fix this constructi­on injustice that prevails.

Money is the lifeblood of every project, and whoever controls the money controls the process. The profession­als should bear this risk and be included in the constructi­on process to completion of each project. All design profession­als’ recommenda­tions should be mandatory for financing in order to issue a practical completion certificat­e. This should also involve profession­al indemnity insurances with partnering profession­als that oversee the projects and protect the client and agencies through the performanc­e of their duties.

The answer simply can’t be to limit the number of mortgages to people building homes to reduce the risk. The prices in the current housing market are out of the reach of most, and we will have to build homes in order to combat this current housing crisis and and hold everyone in the process accountabl­e.