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LP08 DEFECT LIABILITY PERIOD and ACCOUNT CLOSING, AM 98 / JKR PWD 203 /…
LP08
DEFECT LIABILITY PERIOD and
ACCOUNT CLOSING
DEFECT LIABILITY PERIOD
the standard form of construction contracts in Malaysia
-PAM 98 / JKR PWD 203 / IEM / CIDB 2000
-PAM 98 Clause 15
-JKR PWD 203A (Rev 1-2010) Clause 48
-CIDB Standard Form of Contract for Building Works 2000 Edition Clause 27
– Practical Completion & Defects Liability
Defects After Completion
Defects Liability After Completion
shall have taken possession and occupied the works.
Completion of works – issuance of CPC
Sectional completion of works – issuance of CPO
Completion of Works
-Issuance of Certificate of Practical Completion (CPC)
-Completion of outstanding works and remedying defects.
-Default in remedying defects
-Diminuation in value of works
-Certificates of completion of making good defects
Partial Occupation
-Certificate of Partial Occupation. (within 7 days)
-Start of DLP for parts occupied
Certificates of completion of making good defects (relevant parts)
-Reduction in LAD
-Default in remedying defects
-Diminuation in value of works
-Insurance (contractor to notify insurer)
-Performance Bond (realeased after CMGD for whole works)
S.O.
-issue instructions requiring any defects, shrinkages or other faults appearing within DLP due to materials or workmanship not in accordance with the Contract.
Contractor
obliged and liable to rectify defects that appear between the period the Certificate of Practical Completion (CPC) is issued and the expiry of the DLP.
In General : Instruction for rectifying defects, shrinkages or other faults can no longer be issued after 14 days from expiry of the DLP.
Defects
Latent Defects
-defects that are not discoverable by normal examination or testing which manifests itself after a period of time.
Construction Defects- :
defects arising from poor worksmanship or
defective materials.
Patent Defects
-defects that can be discovered by normal examination or testing.
: Usage Damages
-damages due to incorrect operating by users.
FINAL ACCOUNT
provide some mechanism for the final payment to be made to the contractor on completion of the works described in the contract.
payment will be made at the end of the defects liability period provided that all defects have been rectified.
a standard form of construction contracts in Malaysia
Preparing the final account is the process of calculating and agreeing any adjustments to the contract sum
final statement
Agreeing the final account can be a complicated, time consuming and adversarial process,
often resulting in disputes.
Finalizing of the account is not a one sided activity
Entails necessary input of the contractor especially in terms of the provision of the relevant documents, substantiation each in regard to his claims and also of those pertaining to his sub-contractor
Must be a proactive approach on both sides
Strict adherence to any programmed or deadlines set
The Contractor shall submit full particulars complete with supporting documents within but not more than three (3) months after issuing of the Certificate of Practical Completion (CPC).
The Superintendent Officer (S.O) shall issue the Final Certificate within three (3) months after the expiry of the Defect Liability Period for the whole of the Works or three (3) months after the issuance of the Certificate of Completion of Making Good Defect (CMGD).
AM 98 / JKR PWD 203 / IEM / CIDB 2000