Last edited 05 Mar 2016

Patent defects in construction

Contents

[edit] Introduction

Defects are aspects of the works that are not in accordance with the contract. Defects can be 'patent' or 'latent':

When a latent defect becomes apparent, it becomes patent rather than latent.

[edit] Patent defects

At any point up until the final certificate has been issued, defects that are discovered by inspection (patent defects) may be reported to the contractor, who should rectify them within a reasonable time.

In any event, such defects 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.

Once practical completion has been certified, the client has taken possession of the works and the defects liability period (or rectification period) begins.

During the defects liability period, the client may report any defects that arise to the contract administrator. The contract administrator decides whether they are in fact defects in the works (i.e. works that are not in accordance with the contract), or whether they are actually 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 (or certificate of making good). This has the effect of releasing the remainder of any retention and will result in the issuing of the final certificate.

NB If a defect becomes apparent after the certificate of making good defects has been issued, but before the final certificate has been issued, the contractor may be given the opportunity to rectify the defect anyway, but the final certificate should not be issued until this has been done.

If the contractor, having been given the opportunity to rectify defects, fails to do so within a reasonable time, they may be in breach of contract. In this situation others may be employed to rectify the defects, and the cost of such works deducted from the contractor's retention.

In particular circumstances where the cost of rectifying a defect is disproportionate relative to the impact of the defect on the works, the client may agree to have the certificate of making good defects issued anyway, but only on agreement that the contract sum is reduced by an amount that reflects the deduction in the value of the works as a consequence of the defect.

[edit] Certifying practical completion

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.

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.

[edit] Latent defects

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

[edit] Find out more

[edit] Related articles on Designing Buildings Wiki:

[edit] External References:

Comments

Just a note: The last sentence of paragraph 1 in 'Certifying practical completion' is unfinished.

Thanks - this has been corrected.