Lim Ying Hui reviews the Certificate of Completion and Compliance System
The Certificate of Completion and Compliance (“CCC”) system which came into force in all states within Peninsular Malaysia on 12 April 2007 effectively replaces the Certificate of Fitness for Occupation (“CFO”) previously issued by the local authorities under the Street, Drainage and Building Act 1974 (“SDBA”).
The CCC is issued by a principal submitting person (“PSP”) who is defined in SDBA as a Professional Architect, Professional Engineer or building draughtsman registered under the relevant written law.
This article will outline the procedures under the CCC system, the role of the local authorities pursuant to the amendments and some areas of concern.
REASONS FOR THE CHANGE
Under the CFO regime, delays in certification by technical agencies, additional conditions imposed by the local authorities at the time of the CFO application and the lack of technical officers to process the CFO were amongst some of the common problems faced by stakeholders in the construction industry. In order to enhance the competitiveness of Malaysia in the building delivery system, it was thought to be necessary to cut down on red-tape. Self-certification and self-regulation were deemed to be the best way forward.
OUTLINE OF THE CCC SYSTEM
The CCC system applies to projects where the building plan is submitted to the local authority by the PSP on or after 12 April 2007. Its issuance is restricted to technical issues concerning health, safety and essential services. Non-technical issues such as bumiputra quota, low cost housing provision and contribution for public facilities fall outside the purview of the PSP. These have still to be resolved between the owner and the local authorities at the planning and building plans approval stage or via other mechanism.
Section 133 (xiig) of the SDBA imposes an obligation on the state authority to pass by-laws to provide for the time, manner and procedure for the issuance of the CCC and partial CCC.
To ensure that the issuance of the CCC is streamlined in all states, all states in Peninsular Malaysia have adopted essentially identical procedures for the issuance of the CCC. The Federal Territory of Kuala Lumpur differs in certain nomenclature and the numbering of the relevant by-laws. Certain forms used in Negeri Sembilan are numbered differently from the other states. For the purposes of this article, we will adopt the expressions and form reference numbers that are used in the states by-laws (other than Negeri Sembilan and the Federal Territory of Kuala Lumpur).
The CCC shall be issued by the PSP when :-
(a) all technical conditions imposed by the local authority have been complied with;
(b) Forms G1 to G21 (that is certification of completion of various stages of works in a construction project) have been duly certified and received by the local authority;
(c) all the essential services, including access roads, landscape, car parks, drains, sanitary, water and electricity installations, fire hydrants, sewerage and refuse disposal requirements and fire lifts, where required, have been provided; and
(d) the PSP certifies in Form F that he has supervised the erection and completion of the building and that to the best of his knowledge and belief the building has been constructed and completed in accordance with the Act, the by-laws and the approved plans.
The CCC and partial CCC must be issued in Form F and Form F1 respectively.
Within 14 days of the issuance of the CCC or partial CCC, the PSP is required to and must deposit a copy of the relevant certificate and Forms G1 to G21 with the local authority and the Board of Architects Malaysia or Board of Engineers Malaysia, whichever is applicable. A copy of the certificate must also be addressed to the house owner, in respect of a singly built detached house, or the developer in respect of other buildings. The PSP is required to retain a copy of the certificate.
Failure by the PSP to deposit the CCC or partial CCC and Forms G1 to G21 constitutes an offence which is punishable under Section 127 of the SDBA with a fine not exceeding RM10,000.00 and a further fine not exceeding RM500.00 for every day that the offence is continued after conviction.
The role of the local authority
Section 70(22) of the SDBA provides that :-
“Nothing contained in this Act shall affect the powers conferred on the local authority by this Act or any by-laws made thereunder pertaining to the erection and construction of a building for the purpose of ensuring that the erection and construction of such building are in conformity with the approved plans and the provisions of this Act or any by-law made thereunder.”
By-law 25(4) of the building by-laws of each state provides that:-
“Nothing contained in this by-law shall prevent the local authority or any officer authorised by it in writing for the purpose, from inspecting any building works at any stage thereof and calling attention to any failure to the building or non-compliance with these by-laws which he may observe… ”
Although the PSP now shoulders the responsibility of issuing the CCC, the local authority still retains a significant amount of power, which includes the right to issue a written directive to the PSP to withhold the issuance of a CCC until the non-compliance has been rectified.
As in the CFO regime, the powers conferred upon the local authority do not appear to carry with them attendant liabilities. Local authorities still enjoy the wide statutory protection given to them under Section 95(2) of the SDBA. Further, it is now an offence if the PSP fails to comply with any notice issued by the local authority in respect of the rectification of any failure or non-compliance.
It is also an offence under Section 70(27) of the SDBA if the PSP issues a CCC in contravention of a direction given by the local authority to withhold such issuance pending rectification of any non-compliance. In such a case the PSP will be liable on conviction to a fine not exceeding RM250,000.00 or to imprisonment for a term not exceeding 10 years or to both.
Duties, responsibilities and liabilities of the PSP
Section 70(21) of the SDBA provides that:-
“Before the issuance of a certificate of completion and compliance, it shall be the duties and responsibilities of the principal submitting person to-
(a) supervise the erection of the building to ensure that the erection is in conformity with the approved plans and the requirements of the provisions of this Act or any by-laws made thereunder;
(b) ensure that the building has been duly constructed and completed in conformity with the approved plans and the requirements of this Act or any by-laws made thereunder and that all technical conditions imposed by the local authority has been duly complied with; and
(c) ensure that the building is safe and fit for occupation.”
These are in addition to the duties outlined earlier in this article. Failure to comply with his duties, or non-compliance with the requirements imposed, will expose the PSP to a number of penalties as already outlined.
In addition, the PSP may be exposed to disciplinary proceedings under the relevant statute that regulates his profession. In this regard, the Architects Act 1967 and the Registration of Engineers Act 1967 have been amended to increase the penalties to deter wrongful certification and to expressly prohibit fraudulent certification.
AREAS OF CONCERN
Collating Forms G1 to G21
The 2007 amendments make it the sole responsibility of the PSP to ensure that Forms G1 to G21 are duly certified and collated before the CCC is issued. However, as the PSP may not have direct contractual control over the other parties such as the contractors, this may present the PSP with a significant difficulty in ensuring that the said forms are obtained timeously. The PSP may be reliant on the employer imposing sanctions on the relevant parties so that the CCC procedure is not derailed.
Extent of PSP's responsibility
It is further provided in the building by-laws incorporating the 2007 amendments that upon the issuance of the CCC, the PSP accepts full responsibility for the issuance of the said certificate and he certifies that the building is safe and fit for occupation.
It is unclear as to the effect of the term “full responsibility” and whether it means that the PSP will be held vicariously liable for the defaults of the parties who submit their relevant Forms G. This view however, will definitely defeat the purpose of what is commonly known as the matrix of responsibility under the CCC system.
Ineffective matrix of responsibility
Although the professionals such as the architect or engineer are regulated by the relevant statutes, there are many others involved in the matrix of responsibility, such as contractors and sub-contractors, who are not. Unlike professionals, such parties will not be subject to sanctions under the SDBA or the relevant by-laws or to disciplinary actions for any breach of their obligations.
The CCC system seeks to eliminate the inefficiencies in the CFO regime that it replaces. The extent to which it will succeed in achieving this objective depends largely on the ability of the PSP to co-ordinate the activities of and manage the pressure of the many parties involved in any construction project.
LIM YING HUI (