When a construction project is completed it often feels like the end of the line, but latent defects can still emerge long after the building is in use.
Latent defects can go unnoticed for years and only become apparent through failure or damage.
Our Head of the Construction department, Adam Davis, explains who carries the risk of latent defect and how liability is managed under construction contracts.
What is a latent defect?
A latent defect is a fault in construction work that existed at the time of completion but could not reasonably have been discovered by inspection.
Unlike patent defects and visible cracks or incomplete finishes, latent defects remain hidden.
Common latent defects include:
- Concealed structural weaknesses
- Incorrectly mixed concrete
- Poorly installed insulation.
These defects often come to light once water ingress, subsidence, mould or other serious issues occur.
How are latent defects treated in construction contracts?
Most construction contracts include a Defects Liability Period (DLP), which usually last six to 24 months after completion.
In English law, a contractor does not have an automatic right to return and rectify its defective law and a DLP can assist in allowing this to occur.
During this period, the contractor is obliged to return and rectify defects that have been identified by the employer.
However, depending on the wording of the contract, the employer may remain in control and is not necessarily obliged to allow a contractor to return and rectify defects.
Typically, but not always a contract will allow the employer to employ others to rectify defects if they wish and seek the cost of doing from the contractor.
However, the DLP usually addresses defects that become apparent shortly after completion and does not often provide long-term protection against latent defects.
What happens when a claim arises later on?
When a DLP expires, the responsibility for latent defects will depend on the wording of the contract and statutory rights under English law.
Claims may arise under the breach of contract, negligence or specific legislation, such as the Defective Premises Act 1972.
Statutory limitation periods can also extend liability beyond completion. This is up to six years for standard contracts, 12 years for contracts executed as deeds and potentially up to 15 years for negligent latent damage.
In cases of negligence, it is up to six years from practical completion of the works or three years from the effective date of knowledge, up to a maximum of 15 years from practical completion.
This means you could still be at risk of facing a claim many years after leaving the site.
How can you reduce the risk of latent defects?
While latent defects cannot be eliminated, the risks can be reduced through early project management.
This can include implementing robust quality checks and commissioning independent inspections throughout the project.
Contracts should clearly define responsibilities, limitation periods, warranties and any latent defects insurance arrangements.
It is crucial you maintain detailed project records and evidence, such as drawings, inspection records, photographs and correspondence, if a defect later emerges.
How can we support builders and developers if a latent defect arises?
It can feel disheartening if issues arise after your hard work is completed, but you can still protect your reputation and legal position if this occurs.
Our professional team can help draft contracts that fairly allocate risks and advise on limitation periods and notice requirements.
We can help assess whether a defect is a viable claim and help resolve any disputes through negotiation or mediation before they escalate into costly litigation.
If you need advice on how to manage a latent defect claim, contact our team today.