New Financial Assistance Services For People Affected By Construction Damage

Minister for Infrastructure, Planning and Employment Jonathan Attard has announced a new Financial Assistance Service that will provide stronger protection for people whose property is damaged by construction works. The scheme, which will come into force on 1 November, fulfils another electoral pledge within the Government's first 100 days of the current legislature.

Announcing the measure, Attard said the reform is intended to ensure development is carried out responsibly while giving residents access to a fair, effective and timely remedy when construction activity causes damage to their property.

Under the new system, anyone who cannot reach an agreement with the developer or contractor responsible will be able to submit a claim to the Building and Construction Authority (BCA). Following an assessment to establish responsibility, the Authority will be able to compensate affected residents before recovering the costs, together with any applicable interest, from the responsible party.

The Minister said all BCA clearances issued from 1 November onwards will be covered by the new framework. He added that the measure addresses a long-standing issue that often forced residents to shoulder significant costs and lengthy legal procedures to seek compensation.

Attard also announced that the existing bank guarantee system will be replaced by a more active protection mechanism. Based on recommendations from an independent Grant Thornton study, the new framework is intended to intervene directly in support of affected residents rather than relying on a passive guarantee.

He stressed that the scheme will not be financed by the Government or taxpayers. Instead, it will be funded through contributions paid by developers and applicants as part of the BCA clearance process, with no additional burden on public finances or consumers.

The Minister said the initiative forms part of wider construction sector reforms, including the strengthening of the BCA, the introduction of operator licensing, work on the National Building and Construction Code, the Skills Card and new citizen support services. He also said an international comparative study found the Maltese model would rank among the most advanced systems for protecting people affected by construction activity.

Meanwhile, BCA Chief Executive Architect Roderick Bonnici explained that claims may be submitted once no agreement is reached with a developer. A BCA architect will verify the damage before the case is presented to a committee, which may approve compensation of up to €15,000. The process includes an initial assessment, committee approval, the signing of a contract with an advance payment of 50% before repairs begin, and the recovery of funds from the developer responsible.

Bonnici also announced that, from 1 November, developers will begin paying an application fee for BCA clearances. These contributions will fund the reserve supporting the new financial assistance service.

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