Developers’ association approves code of ethics

Developers will have to respect the rights of owners of properties neighbouring construction sites or risk immediate expulsion from their association, according to a code of ethics that has just been approved.

If the provisions are abided by, gone also will be the days when property descriptions do not match the development in question and buyers are taken for a ride when choosing a house.

Complaints that members of the Malta Developers Association have not acted in accordance with the code, which contains 18 clauses, have to be referred to the disciplinary board that was set up, making them liable to immediate expulsion if they fail to rectify the matter after it is decided they are in default.

The MDA has about 148 members, which make up about 75 per cent of developers.

Asked what the implications of expulsion from the association would actually be and what they stood to lose, MDA general secretary Pierre Galea said membership was a form of recognition that the developer was doing his job well and put buyers’ minds at rest.

Among the clauses, members have to make “honesty and integrity” the standard in all their dealings with customers, vendors and agents.

They should avoid misleading property descriptions and advertising and the concealment of pertinent information. Neither can they market property for specific purposes if it is not accessible and usable as such.

The code of ethics spells out that members should observe all financial and legal obligations relating to their transactions with suppliers and customers and they should comply with all applicable laws, including tax, civil and environmental obligations.

It urges them to give due consideration to adequate living space and proper environmental controls.

All developers have to inform prospective purchasers they have a right to independent legal advice and to choose the notary to effect their purchase. They should not require potential buyers to sign binding preliminary purchase agreements without giving them a reasonable opportunity to reflect on the contract and to obtain legal advice. In addition, they should explain what the payment of a forfeitable deposit implies.

Members can no longer enter into a promise of sale of property that is still to be developed if it has no full development permit unless the potential purchasers are clearly informed.

If a person on site is in breach of health and safety regulations, they would have to immediately inform their principals while accepting responsibility for their employees’ behaviour, the code points out.

Asked on what basis the clauses were identified and whether the code highlighted, in a sense, the shortcomings of developers, addressing issues that should be taken for granted, Mr Galea said they were based on discussion and legal advice “for the benefit of the industry”.

The disciplinary board the code of ethics provides for consists of a chairman and two members – independent persons, who are not MDA members. They had been identified but the association was still awaiting their confirmation, Mr Galea said.