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Defects in construction

Revision as of 07:12, 23 July 2016

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 defect becomes 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 contractor to 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 contractor the 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.

For defects that become apparent after the final certificate has been issued see the article on latent defects.

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.