A new financial assistance service will allow people whose property is damaged by construction works to seek compensation from the Building and Construction Authority (BCA), Infrastructure Minister Jonathan Attard announced.
The service will come into effect on 1 November and will apply to all BCA clearances issued from that date onwards.
Under the new system, individuals who fail to reach an agreement with the developer or contractor responsible for the works will be able to submit a claim to the BCA.
The Authority will assess the circumstances and determine whether the damage was caused by the construction works. Where liability is established, the BCA will provide financial redress and subsequently recover the costs, including any accrued interest, from the party responsible.
BCA CEO Architect Roderick Bonnici explained that where a third party and developer cannot agree on alleged construction-related damage, the third party can submit a claim to the Authority.
A BCA-appointed architect will first verify whether the damage was caused by the construction works. The claim will then be submitted to a Reserve Committee, which can approve compensation of up to €15,000.
Bonnici said the service involves four main steps, beginning with the halting of works and the Authority intervening as an intermediary while the damage is assessed.
The second step involves submitting a claim to the Reserve Committee, followed by the signing of a contract with the BCA and a 50% payment before remedial works begin.
The service forms part of a reform of the existing bank guarantee system. An independent study by Grant Thornton identified limitations in the current system, with the Government now seeking to transform the guarantee into an active mechanism that can intervene directly when residents suffer construction-related damage.
Attard stressed that the mechanism will not be funded by Government or taxpayers. Instead, the reserve will be financed by the construction industry and applicants through contributions linked to BCA clearance applications.
The Minister said the measure was intended to address a long-standing situation in which residents affected by construction damage could face significant costs and lengthy proceedings when seeking compensation.
"We are creating a system where the citizen is no longer left to face a problem they did not cause on their own," Attard said.
The measure forms part of a wider reform of the construction sector, including the strengthening of the BCA, the introduction of an operator licensing framework, work on the National Building and Construction Code, the development of the Skills Card and new assistance services for residents.
Attard said an international comparative study had found the Maltese model to be among the most advanced systems for protecting people affected by construction activity, combining assistance services, free professional support, compensation mechanisms and the BCA's recovery powers.
He said the reform also complements recommendations arising from recent years, including those of the Sofia Public Inquiry, while going beyond simply implementing recommendations where further measures were considered necessary.
Attard said the measure was not intended to target the construction industry but to encourage more responsible construction, greater accountability and stronger protection for residents.