Q.
a) Explain what you understand by Certificate of Completion and Compliance (CCC) and how does it differ from the Certificate of Fitness for Occupation (CFO) before this. (15 marks)
b) In your opinion, do you think that the Certificate of Completion and Compliance (CCC) is better than the Certificate of Fitness for Occupation (CFO) for the construction industry in Malaysia? (10 marks)
(25 marks, 2013 Q7)
A.
(a) CCC v CFO
The benefit for the house owner with this new system is that CCC certification can now be issued simultaneously with the issuance of the Notice of Vacant Possession (VP). This will alleviate problems where a buyer is unable to occupy the house even though in possession of the keys.
With the introduction of the matrix of responsibility concept, the elements of accountability and integrity will be further enhanced whereby action can now be taken against those responsible in the event of failures or defects to the building. As such, the quality of building works is expected to be improved.
Below is a verbatim of Bar Council article on CCC entitled "Understanding the new CCC" by Cheong, Yoke Ping.
"CCC stands for the certificate of completion and compliance and is a new term introduced by the Street, Drainage and Building (Amendment) Act 2007 (Amendment Act), which came into force on April 12, 2007. The CCC is meant to replace the certificate of fitness for occupation (CFO).
Under the former system, the CFO was issued by the local authority (LA) under the Uniform By-Laws of the Street, Drainage and Building Act 1974 (Act 133).
The former system was overly cumbersome, time-consuming and subject to abuse. It was not unusual for inordinate delays to occur due to many factors including: noncompliance by the developer for the submission of Form E and its enclosures to the LA, additional conditions imposed by the LA at the time of application of CFO, the involvement of many technical agencies and the lack of technical officers to process the CFO.
Purchasers of properties encounter numerous problems whenever vacant possession is delivered to them by developers and the purchasers could not occupy or renovate their properties because the CFO was not issued.
New system of CCC
The new CCC, based on self-regulation, is issued by the private sector. The responsibility is transferred from the LAs to professionals (architects, engineers and building draftsman) of the project. It seeks to provide better protection for house buyers, cut red tape or bureaucracy in local government and create a more efficient public delivery system. The CCC applies to new projects while those currently under construction will still be issued with CFOs.
Principal submitting person
The CCC will be issued by a principal submitting person (PSP), which is a radical change indeed. The PSP is a professional architect, engineer or building draftsman who submits building plans to the LA for approval. He must be registered under the relevant law relating to registration thereof, eg Architects Act 1967 or Registration of Engineers Act 1967(Revised 1974).
The PSP’s responsibilities include submitting building plans for approval by the LA, supervising the erection and completion of the building in conformity with the approved plans and the requirements of the provisions of Acts or by-laws, ensuring all technical conditions imposed by the LA have been duly complied with and ensuring that the building is safe and fit for occupation.
Six essential services for issuance of CCC
There are six essential services for the issuance of CCC:
• Confirmation of electrical supply (TNB)
• Confirmation of water supply) (water authorities)
• Confirmation of connection to sewerage treatment plant or mains (JPP)
• Clearance from lifts and machinery department, if applicable (JKKP)
• Clearances for active fire fighting systems except for residential buildings not more than 18m high) (Bomba)
• Roads & Drainage
Rectification by LA
The LA may inspect the building site at any time on its own initiative or due to complaints. In the event of failure to comply with the approved plans, the Act or by-laws in the erection and construction of the building, the LA may issue to the PSP:
(a) a written notice requiring compliance within a period specified in the notice, as the Local Authority thinks fit, in order that the non-compliance be rectified; and
(b) a directive in writing to withhold the issuance of CCC until such non-compliance has been rectified.
The LA may itself cause any work to be executed or any measure to be taken if it considers such work or measure is necessary to rectify the non-compliance of its directive and the costs shall be borne by the owner of the building. The costs shall not be subject to any appeal or review in any court.
The LA is also responsible for approving permission of planning application and building plans; pressing charges against the PSP and professionals and reporting to the relevant professional board; inspection of old buildings and continuing to issue CFOs for projects approved before the CCC’s date of enforcement.
Offences under the new system
The Amendment Act has introduced the following new offences and penalties:
• Not a PSP but issues a CCC;
• Issues CCC without forms (relevant forms under by-laws);
• Issues CCC despite direction to withhold -- in contravention to direction of LA to withhold issuance;
• False/fraudulent declaration: Knowingly makes/produces/causes to be made any false or fraudulent declaration, certificate, application or any form under by-laws knowing it/they have been forged, altered or counterfeited;
• Use knowingly: Uses the above form knowing it/they have been forged, altered or counterfeited;
• Occupation without CCC: Occupies or permits to be occupied any building or part thereof without a CCC (This has a wide-ranging effect as it can cover purchasers, tenants, occupiers, owners, trustees, etc);
• Liable on conviction to fine not more than RM250,000 or imprisonment not more than 10 years or both; and
• Increased general penalty: The penalty for the offence of not abiding by the orders of the LA is increased and includes imprisonment for term not exceeding three years and a fine of up to RM10,000.
Offences by architects
False and negligent certification of the CCC by an architect is an offence under the Architects (Amendment) Act 2007 and is grounds for disciplinary action. An enhanced penalty may be imposed by the Disciplinary Committee. The fine is increased from RM10,000 to RM50,000 and the period of suspension of registration is increased from one, to two years.
Offences by engineers
The Registration Of Engineers (Amendment) Act 2007 established a disciplinary committee that is empowered to conduct a hearing of any misconduct or complaint made against any registered Engineer referred to it by an Investigating Committee. In the case of false or negligent certification of the CCC, the fine is increased to RM50,000 and the period of suspension is increased to two years.
Offences under the Housing Development (Control and Licensing) Act 1966
In a related matter, section 22F(1) of the 1966 Act provides that any architect or engineer, as the case may be, who issues a progress certification knowing that the works therein referred to have not been completed in accordance with the provisions of the sale and purchase agreement shall be guilty of an offence and shall, on conviction, be liable to a fine which shall not be less than RM10,000 but which shall not exceed RM100,000 or to imprisonment for a term not exceeding five years or to both.
Sub-section 22F(2) also provides that any person who knowingly and willfully aids, abets, counsels, procures or commands the
commission of an offence under subsection 22F(1) shall be liable to the punishment provided for the offence.
Saving provisions
The former system of issuance of CFO continues to apply where:
• work of erection has not commenced within 12 months from date on which plans and specifications of building were approved; if work commenced on or after April 12, 2007 (Commencement Date), (without prejudice to any penalty);
• work of erection commenced immediately before commencement date;
• work suspended immediately before coming into operation of Act and is to resume on or after Commencement Date; and
• erection of building without approval of plans and specifications by the LA under the Act immediately before Commencement Date provided that an application for approval is made to the LA on or after Commencement Date and the application is approved."
http://www.malaysianbar.org.my/conveyancing_practice/law_realty_understanding_the_new_ccc.html
Further readings can be obtained from:
REHDA
Questions regarding CCC by Malaysian Ministry of Urban Well Being, Housing and Local Government.
How does it differ from CFO?
The process for acquiring certification for each building components is carried out progressively as and when the particular component is completed at the site. As such, the issuance of the CCC is well within the control of the PSP. Furthermore, the issuing period will be more assured since the involvement of the LA in the CCC issuing process is minimal. However, the role of check and balance assumes by the LA remains and, similarly, the power of the LA to ensure the safety of the building being erected is not affected under the new system.
Under the new system, the PSP can issue the CCC immediately after he is satisfied that the construction has fully complied with the provisions of the law and the technical conditions imposed. Whereas under the CFO system, once satisfied with the construction, the Submitting Person submitted an application to the LA for verification and for on-site inspection before the CFO could be issued.
Under the common law, the LA still has a duty of care to ensure that the building is safe and fit for occupation.
Under the new system, the LA still has a role and responsibilities in the CCC issuing process as provided for under the new subsection 70 (23) and (24) of Act 133. Under subsection 70 (23), the LA is empowered to issue written notice to the PSP and SP to rectify any non-compliances beside the power to issue written notice to the PSP to withhold the issuance of the CCC until the non-compliance is rectified. While under the new subsection 70 (24), the LA may itself cause any work to be executed or any measure to be taken if it considers such work or measure is necessary to rectify the non-compliance.
Additionally, the LA also possesses the authority under section 85A of Act 133 to direct that an inspection be carried out by the owner of building after 10 years from the date CCC is issued for that building and every 10 years there on.
Ref:
Common questions relating with the implementation certificate of compliance & completion (CCC). Ministry of Urban Well Being, Housing and Local Government. Available at,