Real Estate Perspective | Policy Interpretation and Response Suggestions on the Guidance of the Quality Warranty Period of New Residential Projects of Shandong Provincial Housing and Construction Department and the Notice of the "Pre-examination and Post-acceptance" System

On June 8, 2022, the Department of Housing and Urban-Rural Development of Shandong Province issued the "Guiding Opinions on Adjusting the Quality Warranty Period of New Residential Projects" (Lu Jianzhi An Zi [2022] No. 4) (hereinafter referred to as the "Opinions"). The minimum period of quality warranty for new residential projects, such as roof waterproof projects, anti-leakage of toilets, rooms and exterior walls with waterproof requirements, heating and cooling systems, water supply and drainage pipelines, will be extended and adjusted, the guidance will come into force on September 1, 2022.

On August 26, 2022, the Department of Housing and Urban-Rural Development of Shandong Province issued the "Notice of the Department of Housing and Urban-Rural Development of Shandong Province on the Comprehensive Implementation of the" A priori House Receipt "System to Promote the Improvement of the Delivery Quality of Residential Projects" (Hereinafter referred to as the "Notice"), it was decided to fully implement the "first house acceptance" system in newly built commercial housing in Shandong Province.

1. Scope of application and adjustment method:

For the quality warranty period of newly-built commercial housing that has newly obtained the right to use state-owned land, the competent department of housing and urban-rural construction shall propose in the opinions on the construction conditions of projects in the field of housing and urban-rural construction; if a performance or supervision agreement is signed with a real estate development unit, the quality warranty period shall be specified in the agreement.

For the quality warranty period of urban affordable housing projects, the construction (agent construction) unit shall include the construction bidding documents and the Construction Contract of Construction Project.

2. Adjustment contents:

For the roof waterproofing works of newly-built residential projects, anti-leakage of toilets, rooms and exterior walls with waterproof requirements, heating and cooling systems, water supply and drainage pipelines and other minimum quality warranty periods have been extended and adjusted, as shown in the following table:

3. Warranty responsibility:

Real estate development (construction) unit:According to the regulations on the sale of Commercial Housing in Shandong Province, the real estate development unit shall bear the responsibility for the quality warranty of the commercial housing to the buyer, and shall perform the warranty obligation and bear the liability for the loss caused by the quality problems within the warranty period. The starting date of the commercial housing quality warranty period shall be calculated from the date of delivery.

Construction unit:According to the Regulations on the Quality Management of Construction Projects, the construction unit shall bear the responsibility for the quality warranty of the construction project to the real estate development (construction) unit. If quality problems occur within the warranty scope and warranty period, it shall perform the warranty obligation and bear the liability for compensation for the losses caused. The starting date of the construction project quality warranty period shall be calculated from the date of acceptance of the project.

4. Safeguard measures:

Compaction quality warranty responsibility:The quality warranty period, warranty scope and warranty responsibility can be clearly stated in the construction bidding (contracting) documents, agreed in the "Construction Contract", and stated in the "New Commercial Housing Sales Contract" and "Commercial Housing Quality Guarantee.

Standardize quality margin management:The total margin reserve ratio shall not be higher than 3% of the total settlement amount of the project price, and the maximum amount shall not exceed 2 years. If the performance bond has been paid or other methods such as project quality assurance guarantee and project quality insurance have been adopted, no quality bond shall be reserved.

Sound incentive guarantee mechanism:Encourage housing enterprises to agree on a longer period of commercial residential quality warranty, give priority to recommend evaluation, encourage housing enterprises to introduce engineering quality potential defect insurance, through the market mechanism to share the risk, broaden the quality warranty channels.

Strengthen guidance and supervision services:In the supervision of key links such as construction drawing review, project quality supervision, and completion acceptance filing, strengthen the process guidance, follow-up inspection, and supervision of the implementation of this guidance. Found the problem, ordered to correct, has been completed acceptance shall be ordered to re-organize the completion acceptance. If it is found that the performance of the quality warranty obligations is not performed or delayed without reason, it shall be ordered to correct, punished and included in the integrity management according to law.

1. Basic requirements for documents

(1) Applicable items:In the newly started construction of commercial housing projects, other residential projects that have not yet been completed and delivered may be implemented by reference.

(2) Principal responsibility:Housing enterprises are primarily responsible for the quality of the homes they sell, and construction, supervision and early-stage property service units actively cooperate.

(3) Specific systems:Residential project quality information publicity, household acceptance, owner inspection, etc.

2. Interpretation of Work Guide:

(1) Quality information publicity:Real estate development enterprises in the start, construction, sales, acceptance, delivery and other stages, according to the progress, batch publicity of residential project quality information, the content mainly includes:(I) basic project information.Including engineering structure form, design service life, engineering planning permission, construction permission, etc.(II) the information of the lifelong responsibility unit and the person in charge of the project quality.Including the names of responsible subjects such as construction, survey, design, construction, supervision, and testing units and the names of project leaders.(III) information on major building materials.Including the names, brands, manufacturers, specifications and models, test results, building energy-saving information of building materials and main decoration materials and indoor facilities and equipment related to the safety of the main structure and main functions.(IV) engineering acceptance information.Including the project quality household acceptance results, project completion acceptance report.(V) quality assurance information.Project quality defect warranty service system, commercial housing after-sales service unit name and contact person, construction unit for some reason lost quality lifelong responsibility to undertake mechanism.

(2) model room tips:Explain whether the quality, equipment and decoration standards of the commercial housing actually delivered are consistent with the model house; if not stated, the commercial housing actually delivered shall be consistent with the model house.

(3) Household acceptance:Real estate development enterprises organize construction, supervision and other units to inspect and accept the physical structure, visual quality and main use functions of each household and related public parts according to the relevant national project quality acceptance standards and design documents before the main structure of the residential project and the completion acceptance of the project, and issue a certificate of acceptance. It is divided into two stages: the completion of the main structure (special acceptance of the visual quality and structural dimensions of the structural works of each household and public parts) and the completion of the unit project (special acceptance of the visual quality, spatial net size and main functions of each household and public parts). Household acceptance shall be recorded house by house and room by room and image data shall be retained. Stages not less than 5 photos per household.

(4) Inspection by the Owner:After signing the house purchase contract and before signing the house acceptance and delivery order, the real estate development enterprise organizes the owner to carry out quality inspection on the commercial housing purchased. The owner can participate in the inspection by himself or by inviting or entrusting others. ① After the acceptance of the main structure division project, organize the owner to enter the open area to explain the development and construction progress, process methods, main building materials, delivery standards agreed in the contract, etc. ② During the decoration construction, organize the owner to check the construction progress, building materials, equipment installation, construction technology, etc. against the purchase contract. ③ If the delivery conditions agreed in the contract are met, the owner shall be organized to inspect the house to be delivered.

3. Interpretation of inspection points

The main points of the owner's inspection mainly include doors and windows, wall top, floor, room clearance size, kitchen and bathroom, electrical, switch, socket, fixed furniture, etc.

In response to the above two new regulations, may have the following specific impact on housing enterprises:

The investment of project funds, the control of construction schedule, the selection of construction, supervision, survey and design units, and the effect of handling complaints about the quality of residential projects are all inseparable from the construction unit, and these are the key factors of project quality control. As the general lead unit of project construction activities, the construction unit is the first responsible person for project quality, has a leading role in ensuring project quality, and assumes full responsibility for project quality in accordance with the law. Therefore, to clarify the connotation of the primary responsibility of the construction unit's project quality, and to define the quality responsibility that the construction unit should perform in accordance with the law, aims to build a project quality responsibility system with the construction unit as the primary responsibility.

To strengthen the disclosure of quality information, the construction units of residential projects need to disclose the project planning permission, construction permit, project design service life, warranty time limit of each division, household acceptance results and other information, so as to ensure the buyer's right to know the housing quality information, and give full play to the supervision and restraint role of the owners on the construction units.

Roof waterproofing works, anti-leakage of toilets, rooms and exterior walls with waterproof requirements, the warranty period is adjusted to 10 years; For heating and cooling systems, the warranty period is adjusted to 5 heating periods and cooling periods. For the installation of electrical pipelines, water supply and drainage pipelines and equipment, the warranty period for concealed parts is adjusted to 10 years and that for non-concealed parts is adjusted to 5 years. The construction unit's quality warranty period for the owner of the house shall be calculated from the date of delivery, and the warranty period may be re-agreed for the parts that have passed the maintenance.

In the household acceptance process, the real estate development enterprise organizes the participating units to inspect and accept the physical structure and main use functions of the project one by one. The real estate development enterprise organizes the owner to enter the house for acceptance. First, the owner is allowed to enter the construction site during the construction process, and the key point is to check the perception quality and the use of materials. First, before the house is officially closed, the owner can enter the house to check the quality of the installation and decoration of water and electricity heating facilities. The above links will lead to an increase in the housing construction cycle and delivery cycle.

In view of the possible impact after the issuance of the above new regulations, in order to avoid foreseeable risks and reduce unnecessary losses, for real estate development enterprises, our lawyers put forward the following suggestions:

The provisions of the notice and opinions on the delivery of houses after a priori and the quality warranty period will inevitably lead to the extension of the housing development cycle and the change of the warranty period, whether it is the bidding documents, the construction contract or the commercial housing sales contract, should be modified accordingly.

First of all, real estate development enterprises should pay full attention to the specific requirements of the construction department on the quality warranty period in the "Opinions on Project Construction Conditions" and the performance/supervision agreement signed with real estate development enterprises.

Secondly, for new bidding projects and newly signed construction contracts, the corresponding quality warranty period, warranty scope, warranty responsibility, etc. shall be adjusted and expressly agreed in the bidding documents and construction contract text, and it is suggested to make an agreement higher than the "construction conditions proposed by the construction department.

Thirdly, the notice clearly states that "other residential projects that have not yet been completed and delivered can be implemented by reference". For projects that have signed construction contracts but have not been completed, in order to avoid overdue delivery of houses due to household acceptance and owner inspection, real estate development enterprises can communicate with construction units to appropriately shorten the construction period on the premise of ensuring the quality of the project, strive for early completion and acceptance of houses, and allow sufficient time for owner inspection.

Fourth, for the newly signed commercial housing sales contract, the impact of household acceptance and owner inspection on the delivery time of the house should be fully considered, and the delivery time should be appropriately postponed. If the delivery time has been agreed, the delivery conditions should be met about half a year in advance as far as possible, and the delivery inspection work should be started. It is specifically suggested to adopt the method of batch and installment delivery to ensure the flexibility of delivery and avoid group risks.

Finally, from the terms of the construction contract of the construction project and the terms of the commercial housing sales contract, the risk of "re-agreeing the warranty period for the parts that have passed the maintenance within the warranty period" is fully predicted and the corresponding terms are set. For example, in the construction contract of the construction project, the re-agreed warranty period is expanded as necessary; In the commercial housing sales contract, the re-agreed warranty period is limited as necessary.

In general, the law is not retroactive, except in favor of the parties. The "Opinions" clearly stated that "this opinion is applicable to newly-built commercial housing and urban affordable housing projects that have newly obtained state-owned land use rights in the province", so the old quality warranty period should be applied to the delivered houses; although the "Opinions" clarified the implementation Time and effective period, but it does not clearly stipulate whether the new quality warranty period applies to houses that have signed contracts but have not yet been delivered. Starting from the legislative purpose of the "Opinions", although contracts have been signed for uncompleted projects and undelivered houses, the new quality warranty period should be applied based on the consideration of strengthening the quality of the project. For the construction unit, although the construction contract has an agreement on the quality warranty period of the project, based on the newly issued Opinions, when the project has not been completed, the quality warranty period of different projects shall be subject to the provisions of the Opinions; The same is true for undelivered houses. During the warranty period, the real estate development enterprise, as the real estate development unit, is responsible for the quality warranty to the buyer, and the start date is calculated from the date of delivery; the construction unit is responsible for the quality warranty to the real estate development enterprise, and the start date is calculated from the date when the project is completed and accepted.

Considering the uncontrollable inspection by the owner and the subjective difference of perception, it is recommended that real estate development enterprises make full use of the organization of construction, supervision and other units to check and accept the physical structure, perception quality and main use functions of each house and related public parts before the main structure of the residential project and the completion and acceptance of the project, so as to solve the visible quality problems in advance as much as possible, if necessary, you can simulate the "pre-acceptance of the house", do a good job of maintenance, maintenance, cleaning and other work in advance, and strive to ensure that the owner's inspection of the high score passed, "flawless" delivery.

It is suggested that real estate development enterprises should improve the housing delivery process and formulate corresponding delivery process guidelines. The "Work Guide for the" First Examination of Houses and Receipt of Houses "for Newly Built Commercial Houses" clarifies that real estate development enterprises should inform the owners of quality information publicity, owner inspection and other related activity arrangements and owner rights when selling commercial houses. Real estate development enterprises can formulate corresponding delivery process guidelines according to the above work guidelines, refine the process of housing delivery, and constantly revise the process guidelines in the specific project delivery process to avoid all kinds of potential risks.

On the one hand, real estate development enterprises should strictly implement legal procedures and contract issuing system, ensure reasonable construction period and cost, and fully perform quality management responsibilities. Real estate development enterprises can make two-dimensional codes for residential project quality information, which is convenient for owners to view basic project information, lifelong responsibility unit and person-in-charge information of project quality, main building material information, project acceptance information, quality assurance information, etc. through mobile phone scanning codes at the sales site and inspection site. They can also consider actively pushing information to buyers (owners) through WeChat.

On the other hand, real estate development enterprises can purchase insurance for potential defects in engineering quality in accordance with relevant regulations, and inform the buyers of the purchase of insurance for potential defects in engineering quality in writing during the pre-sale (sale) of residential buildings; cooperate with underwriting insurance companies and third-party risk management institutions to do a good job in quality risk control; after the occurrence of quality complaints within the scope of insurance, actively urge the underwriting insurance companies to fulfill their warranty obligations.

As construction units, real estate development enterprises need to carry out project construction quality evaluation to ensure that the project quality complies with laws and regulations, mandatory standards for project construction and contractual agreements, strengthen residential project quality management, deepen the disclosure of residential project quality information, and strengthen linkage management with housing presale.