Evaluating the Impact of Defect Risks in Residential Buildings at the Occupancy Phase

This study investigated defect risks in residential buildings using the Loss Distribution Approach (LDA), a method of identifying and quantifying operational risks in economic terms. Analysis was performed on 7554 defects in 48 residential buildings where defect disputes occurred between 2008 and 2017. Defects were classified into eight types: affected functionality, broken items, corrosion, detachment, incorrect installation, missing task, surface appearance, and water problems. Work types were classified into seven groups: reinforced concrete (RC), masonry, finish, mechanical, electrical, and plumbing (MEP), door and windows, furniture, and miscellaneous. Using a risk matrix from these categories, the frequency distribution and severity distribution for each matrix cell was used to calculate loss distributions; these were combined to find the total loss distribution. The defect risks centered on RC and MEP. For RC, broken items and water leaks due to cracks or damage represented the most severe defects. For MEP, severe defects occurred owing to malfunctions in products and installation problems. Loss distributions can be used to create scenarios and corresponding response plans; thus, when a defect dispute occurs, the cost can be assessed. Furthermore, residential buildings' loss distributions for each cell can be used to evaluate the types of work where defects occur and to verify relevant subcontractor's abilities.