Future purchasers and tenants
To help develop this article, click 'Edit this article' above.
The original developer and often the first purchaser or tenant of a property will have an opportunity to enter into direct contractual arrangements to protect themselves against latent defects. It is unlikely that subsequent purchasers or tenants will have such an opportunity, unless they fall within the scope of the Contracts (Rights of Third Parties) Act 1999, and they will be (adopting the terminology of the rule of privity of contract) strangers to the original contractual arrangements with no remedies in contract against the parties responsible for the design and construction of the building.
The courts have often said in such circumstances that the law of contract provides for a chain of indemnity connecting the ultimate user with the original producer: for example D is the ultimate user or consumer who purchased from C the retailer, C having purchased from B the wholesaler and B having purchased from A the manufacturer. D can sue C for breach of contract but not B or A. However, if C is sued by D, then C will have a right of indemnity against B who in turn has a right of indemnity against A, creating 'the chain of indemnity' that links the manufacturer to the ultimate user.
Unfortunately, the strength of a chain of indemnity is only as great as its weakest link. If C the retailer becomes insolvent a critical link in the chain between D and A will have been broken. Further, a purchaser of a freehold building is faced with the difficulty of the principle of ‘caveat emptor’ (buyer beware) and the tenant of a leasehold building with the difficulty of full repairing covenants in the lease.
The future purchaser or tenant must rely on derivative contractual rights. Such rights arise by assignment, which is a unilateral act, or by novation that is synallagmatic (each party is bound to provide something to the other party – see Essentials of a contract).
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Plumbing and heating for sustainability in new properties
Technical Engineer runs through changes in regulations, innovations in materials, and product systems.
Awareness of the Carbon Border Adjustment Mechanism
What CBAM is and what to do about it.
The new towns and strategic environmental assessments
12 locations of the New Towns Taskforce reduced to 7 within the new towns draft programme and open consultation.
Buildings that changed the future of architecture. Book review.
The Sustainability Pathfinder© Handbook
Built environment agency launches free Pathfinder© tool to help businesses progress sustainability strategies.
Government outcome to the late payment consultation, ECA reacts.
IHBC 2025 Gus Astley Student Award winners
Work on the role of hewing in UK historic conservation a win for Jack Parker of Oxford Brookes University.
Future Homes Building Standards and plug-in solar
Parts F and L amendments, the availability of solar panels and industry responses.
How later living housing can help solve the housing crisis
Unlocking homes, unlocking lives.
Preparing safety case reports for HRBs under the BSA
A new practical guide to preparing structural inputs for safety cases and safety case reports published by IStructE.
Male construction workers and prostate cancer
CIOB and Prostate Cancer UK encourage awareness of prostate cancer risks, and what to do about it.
The changed R&D tax landscape for Architects
Specialist gives a recap on tax changes for Research and Development, via the ACA newsletter.
Structured product data as a competitive advantage
NBS explain why accessible product data that works across digital systems is key.
Welsh retrofit workforce assessment
Welsh Government report confirms Wales faces major electrical skills shortage, warns ECA.
A now architectural practice looks back at its concept project for a sustainable oceanic settlement 25 years on.
Copyright and Artificial Intelligence
Government report and back track on copyright opt out for AI training but no clear preferred alternative as yet.
Embedding AI tools into architectural education
Beyond the render: LMU share how student led research is shaping the future of visualisation workflows.
Why document control still fails UK construction projects
A Chartered Quantity Surveyor explains what needs to change and how.
Inspiration for a new 2026 wave of Irish construction professionals.
New planning reforms and Warm Homes Bill
Take centre stage at UK Construction Week London.