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Cracking Up
12/09/2000
The Star Articles of Law with Bhag Singh
In good or bad times, a person still needs a house to stay
in. For some people, owning property is a form of investment. Often there
are problems like defects in houses and unkept promises by housing developers
and property agents.
Different problems arise from time to time. The problems are not always the
same though the house buyer often ends up the loser. A reader complains:
"This concerns a non-defective house that has developed cracks on its walls
or floor due to massive vibrations from piling work in a neighbouring construction
site. What sort of legal action can the affected owner take against the developer
or contractor of the development and where does the local authority stand
in such a situation, especially if it has some stake - a joint venture perhaps
- in the development under its privatisation scheme with the developer?
In this case, the defects were not that made by the developer or house builder.
The problem
arose from the development on the adjoining piece of land.
The situation does not
have much connection with the Housing Developers (Control and Licensing) Act.
Here it is a problem caused by the owner of the neighbouring land. The approach
to be taken therefore is to take action against the land owner and the persons
carrying on the construction activity.
The most appropriate
approach would be to report the matter to the local authority which could
issue a stop-work order of any conditions that apply or are applicable which
are not being complied with or under wider discretionary powers that such
authorities may have.
However, if this does not produce the desired result because the local authority
cannot act or will not act, then the owner of the cracking house must take
action directly against those responsible for causing the damage.
The action that can be
taken can be said to fall into two categories. This will be on the basis of
damage suffered or that is likely to be suffered. In some cases, a party may
want to wait until work on the adjoining land has been completed. At this
stage the damage suffered can be assessed and damages can be claimed. However,
there are shortcomings in this approach. For one, the damage caused may be
extensive and would have been better avoided rather than compensated for.
Secondly, if damages are allowed to accumulate, the party who caused the damage
may not have sufficient resources to pay the compensation.
This is because the owner
of the adjoining land may have charged the land to a financial institution
to the hilt and may have entered into an agreement to sell the building being
constructed. The owner may also push the blame for the damage to the contractor.
Her again, it is not unknown for many contractors to be greatly under-capitalised.
This does not bode well for the owner of property on the adjoining land who
may look forward to being compensated after the work is completed.
Thus it may be more prudent
for persons who are in a position such as our reader to take steps to stop
the construction work on the adjoining land which is causing damage. This
involves applying to the court for an injunction to restrain the construction
activities that is causing the damage. An injunction is a restraining order
and failure to comply with it once it is issued can be contempt of court.
While obtaining an injunction
is a more effective remedy, it must be remembered that obtaining an order
could lead to a claim for damages if the injunction was wrong obtained.
In fact it is usually
one of the requirements in obtaining an injunction for the party applying
for it to give an undertaking that should it turn out that the injunction
was obtained without justification it will pay damages cost to the other party
as a result of the injunction being obtained.
Therefore it is incumbent
for any party that is applying for an injunction is such circumstances to
at least obtain and secure expert evidence which supports the belief that
the cause of the cracks and damage to the property is the construction work
on the adjoining land. This expert evidence is required.
The other aspect of the
question is the position of the local authority if it has some stake in the
development. If the development is under a privatisation scheme with a developer,
what will be the responsibility of the local authority and could it be liable?
The answer depends on
the state of affairs prevailing in respect of the particular development.
The position of the local authority as one that grants approvals for buildings
to be put up is one matter. The fact that it is involve development as a partner
is a separate issue. If such local authority is the owner of the land then
it would be in the same position as any other land owner would be.
If, however, the land
has been alienated or transferred to a company which the local authority has
an interest in either directly or indirectly; then again it is in the position
of a mere shareholder.
A company under the Companies
Act is a distinct and separate entity and the short comings of the company
are not the short comings of its shareholders. If there is any wrongdoing
by the company its shareholders cannot be responsible. Responsibility will
rest on the company and if it is found to be liable and damages have to be
paid, then the ability to pay these damages will depend on its resources.
All these, however, require
that a person has the resources and determination to pursue legal action.
Unless an individual has such resources, effective action can only be taken
if individual owners combine the resources and take action to enforce their
rights. This may not be always be possible.
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