Building regulations amended to avoid damages to third parties in Malta
Following the increasing number of construction accidents, the Government issued the Avoidance of Damage to Third Party Property Regulations on the 25th of June 2019, by means of Legal Notice 136. These Regulations replaced Legal Notice 513.02 of 2013 previously in force, and aim to minimise the risk of damage or injury to third parties during the execution of construction works.
Excavation and demolition adjacent to third party property
The Regulations apply to excavation and demolition works affecting third party property, works consisting in the building of additional storeys over property occupied by third parties, and the construction of new buildings or storeys adjacent to third party property.
Both works commencing after the enactment date, as well as works which had already started are subject to these Regulations, and the Director of the Building Regulation Office reserves the right to issue appropriate orders according to the requirements and nature of the particular site.
Site technical officer (perit) to replace site manager
One of the ways the Maltese Government intends to regulate construction works is with the introduction of a site technical officer. This person is responsible in ensuring that the contractor is complying with his obligations and executing the works.
Previously, the law envisaged the role of a site manager, who had to ensure that the construction had been carried out in conformity with the law. He was nominated by the developer to the Director, and in the absence of such nomination, the developer himself would be deemed to be the site manager. This role lacked any formal requisites, meaning that it could be filled by an ordinary layperson.
The Regulations now provide for a licensed perit to fulfil the role of a site technical officer in cases of demolition, excavation and buildings works. The person is nominated by the contractor and approved by the perit in charge of the project. Although there is nothing in the law prohibiting the same perit to fulfil both roles (which would in turn avoid the possibility of conflict as well as division of responsibilities), the Regulations imply that such role be covered by a different person.
The perit in charge of the project is vested with professional responsibility in regard to the method statement, while the site technical officer is responsible for enforcing the method statement. If the site technical officer is in doubt as to how works are to proceed, he must stop the works and request discretion from the perit in charge of the project. In cases of violation by the contractor, the site technical officer must report to the perit in charge of the project and the Building Regulation Office. On the other hand, the contractor is responsible for implementing the measures found in the method statement.
The law is not clear as to what effect, if any, the introduction of the site technical officer will have on the liability of the perit in relation to his client provided for in Article 1638 of the Civil Code. This article stipulates that if in the course of fifteen years from the date of completion of works, a building perishes, in whole or in part, or else be in manifest danger of falling to ruin, owing to a defect in the construction or even owning to some defect in the ground, the architect and the contractor are both jointly and severally liable. Whether the involvement of the site technical officer will mitigate the liability of the architect remains to be seen.
Added burdens and costs for developers
The developer applying for a permit is now obliged to provide an insurance cover of not less than €750,000, whereas previously the minimum amount was €500,000. The insurance cover must be renewed until the work is completed. The developer must also submit a bank guarantee, the value of which cannot exceed €40,000. The latter may be exempted provided that the developer submits a certified statement issued by an insurance company attesting that the developer is insured in such a manner as to cover indemnity for damages to third party property.
In addition, a method statement and a condition report must be submitted by the developer by not later than 2 weeks before the commencement date. The method statement is to be prepared by the perit in charge of the project in collaboration with the site technical officer and the contractor. On the other hand, a condition report on the opposite, underlying or overlying third party property must be prepared, and a copy of which is to be sent to the third party.
With both the introduction of the role of the site technical officer, as well as the increase in the minimum amount of an insurance cover, the developer will incur more expenses. It is still too early to predict whether this will in any way affect the market value of property to make good for such expenses.
However, the Regulations provide for an exemption. If the perit in charge of the project certifies that the construction works will not affect third party property, then the developer will not be subject to an insurance cover, a bank guarantee, a method statement and a condition report, and a site technical officer would not need to be appointed.
Offences and penalties
Government also increased the penalties which were previously established, to ensure more compliance. In fact, the penalty for failing to comply with the method statement in terms of these regulations has been increased from €500 to €10,000, with a further fine of €500 in the case of a continuing offence.
Likewise, the penalty for failing to abide by the provisions of an enforcement notice has been increased from €1,200 to €50,000, with a further fine of €1,000 euro in the case of a continuing offence.
A person violating these regulations can be made subject either to criminal proceedings, or else an administrative penalty. Discretion as to whether a person is made subject to one or the other is left in the hands of the Director. However, a person cannot be made subject to both at the same time.