Professionals and stakeholders in the real estate sector are being urged to develop minimum standards and collaborate to ensure the sector’s resilience.
The real estate sector has continued to perform robustly, despite economic pressures. Although construction on a whole has experienced a decline in 2022, according to the Statistical Institute of Jamaica, due to the winding down of road works, the real estate market has remained buoyant, with various housing and commercial projects underway by both private and public sector entities, including the National Housing Trust.
Delivering the opening address for the first Jamaica Developers Association (JDA) webinar for 2023 recently, Minister of Justice, Delroy Chuck called for more unity among industry stakeholders and advised that, “instead of primarily competing, members of the Association could collaborate and cooperate even more for their mutual benefit.”
He added that the implementation of a code of conduct for developers would also be effective, noting that such a document should include minimum quantitative standards to which developers can be held to. The Minister said the code would ensure that developments benefit their surroundings instead of damaging them.
“On construction sites, there should be minimum standards of behaviour, noise, neighbourly interaction and dislocation and prompt continuous repairs to roads adjoining and leading up to the development,” he said.
Earl Samuels (second row, right), assistant general manager and chief development financing officer at the Jamaica National Group joined a team of architects and attorneys for a panel discussion on the issuing of Certificates of Practical Completion at the Jamaica Developers Association webinar held on Thursday (June 22).
In his remarks, assistant general manager and chief development financing officer at The Jamaica National Group, Carlton Earl Samuels, also pointed to other challenges that need to be addressed in the sector. He noted that while the construction sector has enjoyed a boom, there are issues hampering orderly development.
Among the challenges, the development financier pointed out, is incomplete or inconsistent information submitted by developers seeking funding for projects. He said JN Bank, which provides financing for up to 80 per cent of the total project cost for a residential development and up to 70 per cent for a commercial development, continues to flag applications from developers due to irregularities in the data submitted.
Citing project budgets as examples, he said there have also been instances where figures have been understated, as the developers fail to either factor in the full cost of the development outside of the financing being sought, or to correctly outline the scope of the project.
“We are concerned about some of these statutory approval documents being received, and these inconsistencies are causing delays. JN is prepared to work with developers to ensure we have a successful housing development sector,” said Mr Samuels.
The JN Group chief development financing officer also called for purchasers to be educated about certificates of practical completion issued by architects. The certificate is often used as a contractual document to allow a client to take possession of a building.
Mr Samuels outlined that there have been instances where purchasers who are issued the document lodge complaints when it becomes apparent that the units are not yet ready to be inhabited. He said more sensitisation will be required to inform stakeholders about what a legitimate document should look like and the terms under which they can be issued.
Architect, Dr Patricia Green, who was also a panelist during the webinar, explained that the architect’s contract can sometimes lead to circumstances where purchasers receive certificates for projects that are practically incomplete.
“The architect’s contract may have been specific to certain items and so the practical completion and the certificate would be with regard to those specific items under the architect’s contract.”
She also suggested that architects send samples of certificates to all financiers and building societies to ensure all parties have an idea of what they look like.
Architect Robert Fowler, who also spoke about the certificates, argued that there may be situations where the certificates are not being issued by qualified professionals. He said it is possible that the certificates are being issued by other persons named in contracts, noting that he suspects that for several ongoing projects, there is no architect being engaged in the final stages.
“An architect may have done the drawings and may have gone as far as getting approval but that becomes the end of their involvement,” he said, while charging financial institutions to insist that these persons are registered professionals.
As part of the solution, the panellists also called on municipal corporations, the regulatory authorities, to be more consistent in inspecting projects and issuing occupancy certificates which would ensure that purchasers get what they agreed to. According to them, this activity is rarely done.
“It should be issued and financiers should ask for it because it is under the Building Act and the certification of occupancy includes all the various issues in terms of Ministry of Health, sewerage; those are the things that say yes you are ready for occupancy,” said Dr Green.
The JDA webinar was held under the theme: ‘Navigating Minefields in Development’. JN Bank was a platinum sponsor of the event which was attended by more than 280 persons. Other presenters and panelists included attorneys-at-law, Alton Morgan, Licea-Ann Smith, John Leiba, and Antwan Cotterell, chair of the Rent Assessment Board, Rose Bennett-Cooper and architect, Robert Woodstock.
The JDA is an umbrella organisation representing the developers of housing and commercial solutions, allied businesses and groups. It currently has 34 members, including associate members represented by commercial banks, legal firms, building societies, suppliers of building materials and major mortgage providers.
