Defects in construction
Defects are aspects of the works that are not in accordance with the contract.
Defects may occur because of:
Design deficiencies.
Material deficiencies.
Specification problems.
Workmanship deficiencies.
Defects can be 'patent' or 'latent'. Patent defects are those which can be discovered by
reasonable inspection. Latent defects are those which cannot be discovered by
reasonable inspection, for example problems with foundations which may not become
apparent for several years after completion when settlement causes cracking in the building.
When a latent defectbecomes apparent, it becomes patent rather than latent.
During the defects liability period, the client reports any defects that arise to the contract
administrator who decides whether they are defects in the works (i.e. works that are not in
accordance with the contract), or whether they are in fact maintenance issues. If the contract
administrator considers that they are defects, then they may issue instructions to
the contractorto make good the defects within a reasonable time.
NB. It is the contractor's responsibility to identify and rectify defects, not the clients, so if
the client does bring defects to the contractor's notice, they should make clear that this is not
a comprehensive list of all defects.
At the end of the defects liability period, the contract administrator prepares a schedule of
defects, listing those defects that have not yet been rectified, and agrees with
the contractorthe date by which they will be rectified. The contractor must in any event
rectify defects within a reasonable time.
When the contract administrator considers that all items on the schedule of defects have been
rectified, they issue a certificate of making good defects. This has the effect of releasing the
remainder of any retention and will result in the issuing of the final certificate.
It is important to note that the defects liability period is not a chance to correct problems
apparent at practical completion, it is a period during which the contractor may be recalled to
rectify defects which appear. If there are defects apparent before practical completion, then
these should be rectified before a certificate of practical completion is issued.
This can put the contract administrator in a difficult position, where both the contractor and
the client are keen to issue the certificate (so that the building can be handed over) and
yet defects(more than a de minimis) are apparent in the works. Issuing the certificate under
these circumstances could render the contract administrator liable for problems that this
causes, for example, in the calculation of liquidated damages.
If the contract administrator is pressured to certify practical completion even though the
works are not complete, they might consider informing the client in writing of the potential
problems of doing so, obtaining written consent from the client to certify practical
completion and obtaining agreement from the contractor that they will complete the works
and rectify any defects. If the contract administrator is not confident about the potential
problems that may result from early certification, they might advise the client to seek legal
advise.
After the defects liability period, the building owner does not have a contractual right to insist
that the contractor rectifies defects not notified during that period. The building owner must
instead seek redress in an action for damages, for breach of contract, or for negligence. In the
case of dwellings there is a statutory remedy provided by the Defective Premises Act 1972.
These rights of action are not perpetual; actions for breach of contract are time barred after 6
years from the date of the breach (usually the completion of the building although with a
failure of design the breach may have occurred earlier), or for a contract under seal, the
period is 12 years
NB, NEC suggest that in the ECC (Engineering and Construction Contract), a defect is '...a
part of the works which is not as stated in the Works Information or not in accordance with
applicable law or the accepted design. There is a reciprocal obligation on both the supervisor
and contractor to notify each other as soon as they are aware of a Defect.' At or just after
the defects date the supervisor issues a defects certificate, which either certifies that there are
no defects, or lists any uncorrected defects.
