The Minister of Infrastructure, Planning and Employment Jonathan Attard, introduced a new service that provides financial aid and helps better protect people that endure damages to their property due to construction activity. This measure, that carries out another electoral promise within the first hundred days of the legislature, will come into force on the 1st of November 2026.
During a press conference, the Minister Attard explained that this reform continues to strengthen the principle that development should be responsibly carried out and when damage occurs, the affected parties should be given effective, fair and a timely remedy.
As a result of the new service, affected parties that were unable to reach an agreement with the developer or contractor involved, can submit an appeal to the Building and Construction Authority (BCA). After evaluating the facts and determining responsibility, the BCA will be able to provide the finances for the damages caused, all while recovering the costs with interest from the responsible party.
The Minister Attard also announced that every clearance published by the BCA from the 1st of November will be covered by this new scheme, to ensure that citizens affected by construction works benefit from the protection that this scheme provides.
Dr. Attard explained how this measure addresses the imbalance that has existed for numerous years, where residents affected from frequent damages had to endure the significant costs themselves and engage in long procedures to find a remedy.
“We are creating a system where the citizen is no longer alone in facing the problem he did not cause himself,” the Minister stated.
This reform also includes the conversion of the existing bank guarantee into a more effective system of protection. Although the independent study carried out by Grant Thornton identifies limitations of the current system, the new system will transform passive guarantee into active guarantee that can intervene directly in favour of the affected person.
The Minister emphasized that the fund is not Government or taxpayer funded, it is financed from the industry and each applicant due to the contributions related to clearance applications of the BCA. This enforces the citizen protection without causing burdens to public finances or consumers.
Dr Attard remarked that this initiative is part of a wider reform of the construction industry that in these past years led to the growth of the BCA, the introduction of the licensing of operators’ section, works on the national code of Building and Construction, the development of the Skill Cards and new services to assist citizens.
He also explained that an international comparative study found that the Maltese model will be among the most advanced systems in relation to the protection of people affected by construction activity. This is due to the combining of assistance services, free professional help, compensation mechanisms and recovery systems set by the Authority.
“This is an initiative that compliments and strengthens the recommendations received throughout these past years, including those that resulted from the public inquiry Sofia. At the same time, it is also a clear example of our commitment to not limiting ourselves to just the implementations of the recommendations. Where we saw the need to go a step further to strengthen the protection of citizens that step was taken,” emphasized Minister Attard.
He stated that this measure is not against construction, but in favour of more responsible construction, credibility and more protection for residents.
“From the 1st of November, a person suffering damages because of construction will no longer be alone. One will have the Authority to listen, a system that helps them and a government that is on their side,” concluded Dr Attard.
The Chief Executive Officer of the Authority, the Architect Roderick Bonnici, explained how the service will operate. After the third party is unable to reach an agreement with the developer about the alleged damage, the same third party will appeal to the Authority. The Authority thanks to an architect will verify whether the damages were a result of the construction works, the same appeal will appear in front of a committee that will approve the appeal with a maximum of €15,000.
“This service will be split into four main steps: the stop works and Authority will intervene as an intermediatory while an evaluation of damages from the BCA is carried out; in the second step an appeal will be made to the Reserve Committee where they will approve the request with a maximum of €15,000; in the third step a contract will be signed by the BCA and a payment of 50% will be given before works start; in the fourth step the BCA will collect the money it paid from the developer,” explained the Architect Bonnici.
Meanwhile, the Architect Bonnici explained that to this day, the Building and Construction Authority did not accept application payment however, due to legal amendments, from the 1st of November every developer must start paying for his application to be processed, which will sustain the reserve that was created for this new service. The contributions that must be paid upon the applications reflect the bank costs related to the maintenance of the bank guarantee as it is today.
Present for this conference was the Permanent Secretary of the Ministry Mr Ronald Mizzi, the Chairman of the BCA Board the Architect Simon Saliba and a number of stakeholders in the construction sector.
