When a construction project reaches completion, it should always be the intention of the contractor to walk away from the project with full confidence that it meets the conditions specified in the construction contract. However, clients still require some form of assurance that there are no defects or, should any be discovered, that they will be dealt with in a timely and efficient manner.
The Defects Liability Period exists for this very reason. During this period – which typically lasts six to twelve months – the client can report any issues they believe to be defects. It will then be up to the contract administrator to decide if these are in fact defects or maintenance issues.
If defects are identified then they will be presented to the contractor who will need to rectify them within a reasonable period of time. Should the contractor fail to do this then they risk being in breach of contract. There is also the option for the client to refer to another company to complete the work and bill the cost to the original contractor.
The Defects Liability Period exists to offer clients peace of mind that the quality of a project has been upheld and offers contractors the chance to make good on any potential faults that may have occurred during the construction process – as these faults can occur even if every ‘t’ has been crossed and every ‘i’ has been dotted.
After the Defects Liability Period ends…
If any defects are found after the Defects Liability Period has ended, the client will not be able to insist the contractor rectify them. Instead, they will need to go down the road of addressing these defects as breaches of contract or negligence, with the outcome being compensation for damages.
These damages are referred to as Latent Defects and can be anything from water damage to inadequate foundations. There is a standard Defects Liability Period, however, property developers and owners can further safeguard their investment with Latent Defects Insurance.
Latent Defects Insurance
It can take time for some defects to become evident, potentially resulting in devastating flaws. Latent Defects Insurance is designed to minimise the effects of this damage by offering a suitable way for these defects to be dealt with even after the Defects Liability Period has ended.
If a defect or defects render a structure uninhabitable or not fit for purpose then Latent Defects Insurance covers the costs of repair or rebuild. Examples of when Latent Defects Insurance is beneficial are debris removal, contamination cover, and mechanical or electrical faults.
Mercantile Barristers are specialist consultants in the law for when the legal issues involved are complex, intricate and so important that the most seasoned expertise in advice and handling is required.
Our expertise can help guide you through complex matters such as construction contract drafting, running through conditions and warranties and offering advice in the case of disputes.