RICS PRACTICE INFORMATION

Defects and
rectifications
England and Wales
2nd edition, August 2024
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Defects and rectifications

RICS practice information, England and Wales
2nd edition, August 2024

Published by the Royal Institution of Chartered Surveyors (RICS)

Parliament Square
London
SW1P 3AD
www.rics.org

No responsibility for loss or damage caused to any person acting or refraining from action as a result
of the material included in this publication can be accepted by the authors or RICS.
ISBN 978 1 78321 534 8
© Royal Institution of Chartered Surveyors (RICS) August 2024. Copyright in all or part of this
publication rests with RICS. Save where and to the extent expressly permitted within this document,
no part of this work may be reproduced or used in any form or by any means including graphic,
electronic, or mechanical, including photocopying, recording, taping or web distribution, without the
written permission of RICS or in line with the rules of an existing licence.
This document applies to England and Wales.
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Acknowledgements
RICS would like to thank the following for their contributions to this practice information:

Technical author

Khalid Ramzan (Pinsent Masons)

Black Book working group

Chair: Andrew Smith (Laing O’Rourke)

John G Campbell (BAM Construction Limited)

Duncan Cartlidge

David Cohen (Amicus Development Solutions)

Stuart Earl (Gleeds Cost Management Limited) Christopher Green (Capita Symonds Ltd)

Jim Molloy (Department of Health, Social Services and Public Safety NI)

Roy Morledge (Nottingham Trent University)

Michelle Murray (Turner & Townsend plc)

Alan Muse (RICS, Director, Built Environment Professional Group)

Michael T O’Connor (Carillion Construction Limited)

Matthew Saunders (RICS, Built Environment Professional Group)

Kevin Whitehead (McBains Cooper Consulting Limited)

Second edition authors

Roland Finch FRICS

Steven Thompson FRICS (RICS)

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Contents
Acknowledgements ����������������������������������������������������������������������������������������������� ii
RICS standards framework ����������������������������������������������������������������������������������� 1
Document definitions ����������������������������������������������������������������������������������������������������� 2
1 Introduction ������������������������������������������������������������������������������������������������������ 3
1.1 Purpose ������������������������������������������������������������������������������������������������������������������ 3
1.2 What a defect is ����������������������������������������������������������������������������������������������������� 3
1.3 The distinction between patent and latent defects ������������������������������������������ 4
1.4 Differing consequences of patent and latent defects ��������������������������������������� 5
1.5 Applicable law �������������������������������������������������������������������������������������������������������� 5
2 General principles (Level 1 – Knowing) ���������������������������������������������������������� 6
2.1 Patent defects �������������������������������������������������������������������������������������������������������� 6
2.2 Latent defects ������������������������������������������������������������������������������������������������������ 10
3 Practical application (Level 2 – Doing) �������������������������������������������������������� 13
3.1 Patent defects ������������������������������������������������������������������������������������������������������� 13
3.2 Latent defects claims ������������������������������������������������������������������������������������������� 15
4 Practical considerations (Level 3 – Advising) ��������������������������������������������� 18
4.1 Patent defects ������������������������������������������������������������������������������������������������������ 18
4.2 Latent defects ������������������������������������������������������������������������������������������������������ 20
4.2.4 Advising on limitation periods under tort �������������������������������������������������������� 22
Appendix A Summary of limitation periods ���������������������������������������������������� 26
Appendix B Example list of records to be kept ����������������������������������������������� 27

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RICS standards framework

RICS’ standards setting is governed and overseen by the Standards and Regulation Board
(SRB). The SRB’s aims are to operate in the public interest, and to develop the technical
and ethical competence of the profession and its ability to deliver ethical practice to high
standards globally.

The RICS Rules of Conduct set high-level professional requirements for the global chartered
surveying profession. These are supported by more detailed standards and information
relating to professional conduct and technical competency.

The SRB focuses on the conduct and competence of RICS members, to set standards that are
proportionate, in the public interest and based on risk. Its approach is to foster a supportive
atmosphere that encourages a strong, diverse, inclusive, effective and sustainable surveying
profession.

As well as developing its own standards, RICS works collaboratively with other bodies at
a national and international level to develop documents relevant to professional practice,
such as cross-sector guidance, codes and standards. The application of these collaborative
documents by RICS members will be defined either within the document itself or in
associated RICS-published documents.

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Document definitions
Document type Definition
RICS Set requirements or expectations for RICS members and regulated
professional firms about how they provide services or the outcomes of their
standards actions.

RICS professional standards are principles-based and focused on

outcomes and good practice. Any requirements included set a baseline
expectation for competent delivery or ethical behaviour.

They include practices and behaviours intended to protect clients and

other stakeholders, as well as ensuring their reasonable expectations of
ethics, integrity, technical competence and diligence are met. Members
must comply with an RICS professional standard. They may include:

∫ mandatory requirements, which use the word ‘must’ and must be

complied with, and/or
∫ recommended best practice, which uses the word ‘should’. It is
recognised that there may be acceptable alternatives to best practice
that achieve the same or a better outcome.
In regulatory or disciplinary proceedings, RICS will take into account
relevant professional standards when deciding whether an RICS member
or regulated firm acted appropriately and with reasonable competence.
It is also likely that during any legal proceedings a judge, adjudicator or
equivalent will take RICS professional standards into account.
RICS practice Information to support the practice, knowledge and performance of
information RICS members and regulated firms, and the demand for professional
services.

Practice information includes definitions, processes, toolkits, checklists,

insights, research and technical information or advice. It also includes
documents that aim to provide common benchmarks or approaches
across a sector to help build efficient and consistent practice.

This information is not mandatory and does not set requirements for
RICS members or make explicit recommendations.

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1 Introduction

1.1 Purpose
This practice information is aimed at construction professionals who manage the
identification and rectification of defective construction work when it occurs or those who
have to address the consequences of this defective work. Such defects may emerge during
construction, during a contractual defects ‘rectification’ or ‘liability' period, or at some point
after all other contractual obligations have been completed.

Two key factors determine the approach to be taken towards defects.

• When they occur: contractual mechanisms and the legal approach to defects will differ
depending on whether they occur during construction, during the defects liability/
rectification period or after the issue of a certificate to the effect that all notified defects
have been attended to satisfactorily (commonly known as a ‘certificate of making good’).
• Whether defects are latent or patent: by their nature, defects can only be rectified once
they become ‘patent’ or apparent. Defects that have remained latent (i.e. undiscovered)
for some time give rise to a number of often complex legal issues (relating, for example,
to evidence of causation, whether the claim is barred for being out of time or whether the
claim can even be brought under contract law). Such complexities do not usually affect
patent defects. See Appendix A for a table providing a summary of the various limitation
periods that apply in a number of situations, set out within the following sections of this
practice information.

1.2 What a defect is

For such a key term, it is surprising how few standard form contracts define a ‘defect’.
Neither FIDIC nor JCT define the term in their main ‘standard form’ construction contracts
(with the possible exception of the JCT Major Projects Contract), although NEC does
introduce a standard definition.

A defect could be a reference to faulty workmanship, faulty materials or faulty design. For
a defect to be actionable in contract law it must primarily be a breach of contract (in that a
contractor has failed in its obligation to carry out the work in accordance with the contract).
If the contract specifically requires the use of broken or sub-standard slates, that might
require the use of defective materials, but would not be an actionable defect. If, however,
high-quality red clay tiles have been used where the contract specified brown tiles, then that
in law will be a breach of contract and the work may be deemed defective.

This concept of a defect as essentially a breach of contract is reflected in the NEC definition
of ‘defect’, which is:

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‘a part of the works which is not in accordance with the Works Information
('Scope’ in NEC4), or a part of the works designed by the Contractor which is
not in accordance with the applicable law or the Contractor’s design which the
Project Manager has accepted.’

There is no comprehensive definition of what constitutes a ‘defect’ in English common law. A

frequently quoted starting point is the case of Yarmouth v France (1887) 19 QBD 647, in which
a defect is described as:

‘anything which renders the plant unfit for the use for which it is intended,
when used in a reasonable way and with reasonable care’.

The practicalities of construction demonstrate that there are degrees of seriousness in

defects, some of which may not be sufficiently serious to impede practical completion and
are addressed in snagging lists.

Note, however, that most standard form construction contracts make the decision on
whether practical completion has taken place a subjective one and requires the engineer,
supervisor or contract administrator to form an opinion. Keating on Construction Contracts
says that works can be practically complete if there are latent defects, but that a certificate
of practical completion cannot be issued where there are patent defects.

1.3 The distinction between patent and latent defects

In theory, the distinction between patent and latent defects should be easy to identify.
Patent defects are ‘obvious’ defects. Latent defects are hidden and become apparent at
a later date. A patent defect could be something that is visually obvious, for example, the
omission of mastic seal in the required areas around a shower or bath unit. Such patent
defects are often recorded in snagging or defect lists at the time of practical completion.
Latent defects may include those defects that, while not obvious at practical completion,
become obvious soon after.

If defects become patent during the defects rectification period, most standard form
construction contracts contain mechanisms for rectifying them.

A latent defect could be a defective foundation, where there is no visual sign of the defect at
completion, or for a significant time thereafter, but which could cause the building to subside
in the future. There may, however, be defects that are not discovered simply because the
person charged with discovering them failed to carry out their investigations properly.

For this reason, the English courts have defined latent defects as those defects that do not
become obvious even though the requisite level of skill and care had been exercised in
searching for and identifying them.

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1.4 Differing consequences of patent and latent defects

For patent defects, the key concerns are establishing the employer’s right to have the
contractor rectify during the appropriate period, whether that is before practical completion,
at practical completion or during the defects rectification period. For defects that are
discovered some time after practical completion and may be of a more substantial nature,
practitioners must consider if there is a contractual right of recourse (e.g. through collateral
warranties or third-party rights) or whether an action in tort would be more appropriate (in
Scottish law tort is referred to as ‘delict’). In the case of tort in particular, this gives rise to
complex questions on limitation periods. In some circumstances there may also be rights
under specific statutes such as the Defective Premises Act 1972 (DPA), as amended by the
provisions of the Building Safety Act 2022 (BSA).

1.5 Applicable law

In this practice information, any references to the position under law is to English law as
it applies in England and Wales, unless specifically stated otherwise. Users of this practice
information should not assume that the position under Scots law or the law in Northern
Ireland will be identical to the position in England and Wales.

Practitioners should always investigate and apply the proper law to the particular
circumstances of their project and, where necessary, take appropriate professional advice.

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2 General principles (Level 1 –

Knowing)

The extent of the contractor’s liability for defects will depend on the nature of risk the
contractor has assumed under their contract. A design and build contractor will be
responsible for defects in design, materials and workmanship. A construct-only contractor
will ordinarily only be responsible for defects in workmanship. Any dispute about defects can
lead to complicated issues of causation and the apportionment of responsibility for design
or workmanship related risks. In the case of contracts with a contractor’s designed portion
– where the contractor is required to design parts of the work – the task of identifying
responsibility for design and workmanship could be more complicated still, particularly
where the actual description of the contractor’s designed portion is unclear or in dispute.

Design professionals, contractors and subcontractors can also be liable for defects in
design if their contract contains design responsibilities and obligations. Their role should
not be overlooked. Often the root cause of defects lies in the design. Once contractors have
demonstrated that they have exercised the appropriate standard of workmanship and
diligence in the execution of their works, the spotlight will inevitably fall on the design and
designers. There is also an added incentive on claimants to pursue designers since they
carry professional indemnity insurance, which is a source of potential financial remedy not
dependent on the solvency of the designer, whereas there is often no similar recourse in
respect of workmanship only.

2.1 Patent defects

2.1.1 Defects before completion (‘temporary disconformity’)

There is a debate in English law as to whether defects that occur before practical completion
can actually be characterised as defects. The doctrine of ‘temporary disconformity’ provides
that activities undertaken by a contractor prior to practical completion are a work in
progress. Any defects during that period are subject to rectification and, provided the works
at practical completion are free of defects, the employer ought not to interfere in the earlier
works. Proponents of this doctrine argue that the employer’s remedy for delays to practical
completion that have resulted from badly programmed and executed works is in the right
to receive liquidated damages. Such damages are meant to compensate for delays that are
caused by the poor management of a project, with the contractor taking the risk of any
additional works that have been required in order to achieve practical completion.

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This doctrine sits uneasily in the practical reality of construction. The employer might be
growing increasingly concerned at the way in which works are being undertaken and may
want to encourage progress to avert a failed project. However, the key risk for an employer
is ensuring that any such intervention prior to practical completion is not misconstrued
as giving rise to claims of employer prevention. For this reason, contracts should provide
specific recourse in the event of defective works prior to practical completion.

2.1.2 Defects under JCT

The JCT standard building contract contains a number of provisions to address defect issues
pre-completion. The architect/contract administrator has a right to open up any work for
inspection or to test materials or goods ‘whether or not [they are] already incorporated in the
Works’. The cost of such inspections or tests is at the employer’s risk unless the work is found
not to be in accordance with the contract. In addition, the architect/contract administrator
has a number of options where work is found to be defective. These include instructing the
removal of any defective works, accepting that the defective work can remain or ordering
further opening up for inspections or tests to identify:

‘to the reasonable satisfaction of the Architect/ Contract Administrator the

likelihood or extent... of any further similar non-compliance’.

Any such opening up must be in accordance with the Code of Practice contained within
the contract, which provides a list of criteria that the architect/contract administrator
must consider when instructing opening up. The Code of Practice is designed to guide the
architect/contract administrator ‘in the fair and reasonable operation’ of the power to issue
instructions. The Code of Practice is a useful way of regulating such investigations, providing
a list of issues the architect/contract administrator should consider when deciding the
approach to take, for example, the need to act proportionately, or as the Code of Practice
puts it, to consider ‘the significance of the non-compliance, having regard to the nature of the
work in which it has occurred’.

2.1.3 Defects under NEC Engineering and Construction Contract (ECC)

The NEC approach to defects during construction (and after completion) is set out in the
contract. The role of ‘policing’ quality under the ECC is given to the supervisor rather than the
project manager. Thus the supervisor notifies defects and issues the defects certificate.

However, the project manager has the role of deciding whether or not to accept the
defects. The contractor has to correct a defect whether or not it has been notified of it. The
supervisor may also instruct the contractor to search for a defect, but must give reasons
for the search in the relevant instruction. Until the ‘defects date’ (see section 2.1.6), the
supervisor can instruct the contractor to search for defects. This can include activities such
as uncovering, dismantling, recovering and re-erecting work, as well as carrying out tests and
inspections that have not been provided for in the works information.

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Similar to the provisions of the JCT standard building contract, the ECC also contains a
provision enabling the acceptance of a defect, by way of an amendment to the works
information, to make the defect compliant with the contract. Such acceptance requires the
contractor to submit a quotation for reduced prices, an earlier completion date or both
(although interestingly, does not mention earlier ‘key dates’). Where the project manager
accepts the quotation, an instruction is given to change the works information, the prices
and the completion date. Without that acceptance, the works information is not changed and
therefore the defect remains to be rectified.

2.1.4 Defects under FIDIC

Under the FIDIC Red Book (construct-only form) there are extensive provisions enabling the
employer to monitor the plant, materials and workmanship being used in the works. There
is an obligation on the contractor to submit samples of materials and relevant information,
and to allow access to any sites at which natural materials are being prepared so that the
employer can inspect or carry out tests. The engineer has specific powers to reject:

‘Plant, Materials or workmanship … found to be defective or otherwise not in

accordance with the Contract’.

In addition, costs associated with retesting of plant materials and workmanship, as a result of
rejection, are at the contractor’s risk.

The doctrines of temporary disconformity or employer prevention (see section 2.1.1) may
have no influence in legal systems based on civil law (such as France, Germany and some
Middle Eastern countries). This is reflected in the Red Book, which gives the employer or
engineer a number of remedies for construction stage defects. Red Book provides specific
powers to the engineer to instruct remedial works that include the power to instruct the
removal and re-execution of works that are not in accordance with the contract. In addition,
during the carrying out of the works, the employer has the express power to employ third
parties where the contractor fails to rectify defects. The contractor is liable for such costs of
rectifying defects, except where they would have been entitled to payment to rectify them.

2.1.5 Post-completion defects – why the contractor should return to

rectify defects
If a contract does not contain an express obligation on the contractor to return to rectify
defects, there is generally no obligation on the contractor to return and no obligation on the
employer to permit the contractor to re-enter and carry out rectification works.

Whatever the precise contractual provisions for defects rectification might be, there are
clear incentives for the contractor to rectify defects. The most immediate incentive for the
contractor is the retention, the second half of which is returned only once a certificate has
been issued certifying that defects have been rectified (certificate of making good issued
under JCT). When certifying practical completion, the architect/contract administrator should
satisfy themselves that the retention monies that will continue to be held will cover the cost

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of snagging. Provided that the contract has been properly negotiated and an appropriate
level of retention has been agreed, the retention should provide sufficient security for the
rectification of defects that emerge during the defects rectification period. The employer
should not need to use the valuation process post-practical completion as a method of
obtaining additional security for the remedying of defects (for example building into the
valuation the assumption that rectification will have to be undertaken by third parties).
Adopting such an approach to valuation might also be in breach of contract.

Defects are a breach of contract, thereby exposing the contractor to general damages that
will primarily be based on the cost of rectifying those defects. The defects rectification
period therefore represents, for the contractor, a way of mitigating exposure by avoiding the
risk of the employer employing a third party to rectify and claiming those third-party costs
(which are likely to be substantial, as a new party will have its own mobilisation costs and
will expend time in familiarising itself with the works). The existence of a period for rectifying
defects emerging post- completion is therefore in both parties’ interests.

2.1.6 Obligations to return to rectify defective works

Many standard forms contain an obligation on the contractor to return to rectify defects
identified during a defined period after practical completion (the ‘Defects Rectification
Period’ in the case of JCT).

In JCT, the obligation is on the contractor to make good at no cost to the employer all such
‘defects, shrinkages or other faults’. The defects rectification period begins from the date of
practical completion of the works for a period that is specified in the contract particulars,
often 12 or 24 months, or more. If no such period is stated, the default period is six months
from the date of practical completion of the works. In addition, it is usually the practice
for the architect/contract administrator to issue a snagging or defects list for de minimis
defects at the stage of practical completion. The architect/contract administrator can issue
a schedule of defects that occur during the defects rectification period that can be delivered
to the contractor as an instruction for a period of 14 days after the expiry of the rectification
period.

In addition, the architect/contract administrator can issue instructions for any ‘defect,
shrinkage or other fault’ to be made good until such time as the schedule of defects has
been issued, or more than 14 days after the expiry of the defects rectification period. Apart
from the retention that the employer will have as security (see section 2.1.5), the contractor
remains incentivised to remedy defects under the overarching principle that defects are a
breach of contract entitling the employer to damages.

Under FIDIC, the defects rectification period works in a similar way to the JCT form, in that
it is the period in which defects can be notified by the engineer to be corrected by the
contractor in a reasonable time period. The procedure relies on the employer or, at the
employer’s request, the engineer giving notice of defects. The notice can be in the taking
over certificate or issued during the defects notification period as defects become apparent.
The onus is therefore on the employer to ensure that it complies with the notification

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procedure to instruct defects rectification. It is also worth noting that the FIDIC Red Book is a
construct-only form, and the costs of rectifying defects are only assumed by the contractor
in specific instances where the works have been carried out in breach of contract. If the
defects in the works are due to design for which the contractor is not responsible, then any
additional work executed will be treated as a variation.

By contrast to the position under FIDIC, the contractor under NEC must correct a defect
whether notified or not. The defects date under NEC is a date set out in the contract data
and equates broadly to the end of a period for defects correction found in other standard
forms. Until the defects date (that is, before and after completion), there is a mutual
obligation on the supervisor and the contractor to notify each other of a defect.

There is a further concept under NEC relating to defects – the ‘defects correction period’.
This is not the same concept as the ‘Rectification Period’ used under JCT or similar concepts
under other standard forms. Under NEC, the defects correction period is a specific period
(calculated in weeks) within which the contractor must remedy defects after completion
(in the case of defects notified before completion) or if a defect is not notified before
completion, a period starting from when the defect is notified. There can be several defect
correction periods (the standard form contract data considers this). This can be useful on
projects where, for example, a defect to critical plant might require a speedier response
than defects to other elements of a building. It also enables defects that give rise to health
and safety risks to be allocated a specific (shorter) defects correction period. The defects
correction period or periods should be set out in the contract data on a project-specific basis.

In the NEC context it is also worth noting the additional obligation that obliges the contractor:

‘Until the Defects Certificate has been issued and unless otherwise instructed
by the Project Manager ...[to] replace loss of and [repair] damage to the works,
Plant and Materials.’

This is in addition to the obligations that exist specifically in respect of defects and the repair
obligation appears to apply irrespective of the cause of such loss or repair. Practitioners
acting for contractors should analyse the implications for their particular project as the onus
appears to be on the contractor (if it is to establish an entitlement based on a compensation
event) to show that the cause of the damage to the works, plant or materials is due to an
employer’s risk.

2.2 Latent defects

2.2.1 Claiming for latent defects

Claims for latent defects are likely to arise after all other contractual obligations have been
completed and often (in the case of defective foundations) a long period after completion.
Practitioners may have to look outside the confines of the contract at the overall context of
the construction works to ensure that all avenues of recourse can be explored.

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In summary, there will generally be three routes open to the party suffering the defective
works (‘the victim’).

2.2.1.1 A contractual remedy in the law of contract.

This route is the most common route by which a latent defect is raised and dealt with for
major building, civil engineering and infrastructure works. While a contract does not have
to be a written document (a contract may arise through purely oral agreement – something
to be aware of when considering construction works undertaken for homeowners),
construction contracts are usually in writing or at least evidenced in writing. In English law,
the doctrine of ‘privity’ means that generally only those with a contractual relationship
can sue in the law of contract. If there is no direct contract, e.g. under a professional
appointment or a building contract, then a contractual remedy may arise and be exercised
through a collateral warranty or in rights granted to a third-party beneficiary under the
Contracts (Rights of Third Parties) Act 1999 (similar legislation exists in Scotland).

2.2.1.2 A remedy under tort law

This is a branch of English common law concerned with compensating victims for wrongs
committed by other parties with whom the injured party may have no pre-existing
relationship, but where the law creates a relationship and imposes a duty of care on one
party not to inflict injury on another. An everyday example is the duty on motorists not to
injure fellow road users or damage their property. Road traffic accident claims are pursued
under the law of tort.

In a construction context, contractors, subcontractors and design professionals typically

carry out work and services that may affect parties with whom they have no contractual
relationship. For example, the performance of a subcontractor may impact on the value of
the employer’s investment.

Where there is no direct contractual relationship established, for example through a

collateral warranty, the victim of defective design may seek to establish that it has a
relationship with the culpable contractor, subcontractor or design professional and therefore
that person owes the victim a duty of care in tort. Such relationships can be difficult to
establish in law, particularly following the landmark decision in Murphy v Brentwood DC [1991]
1 AC 398, which has been upheld in decisions of the English courts ever since. This case
decided that defective construction work that results in loss to the owner of the building
through negligently designed foundations is characterised in law as ‘pure economic loss’ (the
loss that the owner suffers being loss in the value of the building or the cost of putting right
the defects). Tort law cannot be used to compensate a loss that manifests itself purely in a
reduction in the market value of the victim’s property.

There is another branch of tort law under which an action might arise in cases where advice
is given for a specific purpose to known recipients. In such cases an adviser (e.g. a certifier,
architect or other professional) might be held to have assumed responsibility for negligently
certifying that a property is free of defects. This type of claim is known as ‘negligent

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misstatement’ and the authority for it stems from the case of Hedley Byrne and Co Ltd v Heller
and Co Ltd [1964] AC 465.

2.2.1.3 A claim under the Defective Premises Act

In certain circumstances, those with an interest in a ‘dwelling’ (generally those who occupy a
building as their private residence) may have a claim under statute against those involved in
the design and construction of the dwelling in the event that it is not fit for habitation when
completed.

2.2.2 Introducing limitation periods

The available options when considering actions for latent defects will depend on whether
an action can actually be brought in the courts. The law does not allow actions to remain
pending indefinitely. The Limitation Act 1980 (‘the Act’) is the main source of law in England
and Wales governing the time limits for bringing actions (different legislation applies in
Scotland and it should not be assumed that claims in Scotland will be subject to the same
limitation position as discussed below, so the position under Scots law should be carefully
investigated, if relevant). Actions not brought within the relevant time period will be time
barred. Therefore, no matter how good a claim may be, the claimant will not be able to
proceed further with it once the court has accepted the defendant’s case that the claim is
brought out of time.

An action is considered ‘brought’ when the claim is actually filed at court and the court issues
the claim form at the request of the claimant. The full text of the Act should be consulted, as
different time limits apply depending on the nature of the claim. Claims for personal injury,
for example, have shorter limitation periods (and these are not addressed in this practice
information), but the Act should be referred to for these and other limitation periods that
might be relevant in a defects context.

The basic position is that a breach of contract claim must be brought within six years from
the date of the breach in the case of ‘simple’ contracts. Simple contracts are those agreed
between parties (whether orally, wholly in writing or evidenced in written documents or a
combination of oral conduct and written documents) without expressly being executed as
deeds. Actions under a deed must be brought within 12 years from the date of practical
completion. The limitation period for claims in tort, however, runs for a period of six years
from the date that harm caused by the tort occurs and not from when the actual tort was
committed.

Reference should be made to the Building Safety Act 2022, which has amended the
provisions of the DPA in respect of the limitation period that applies.

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3 Practical application (Level 2 –

Doing)

3.1 Patent defects

3.1.1 Practical completion

Practical completion is a key milestone in the construction process. A number of
consequences flow from it, and they are discussed in detail in the current edition of
RICS’ Defining completion of construction works. From the perspective of defects, the
criteria for achieving practical completion are dependent to a large degree on what the
contract provides. To varying degrees, standard forms also require the certifier to exercise
professional judgement and discretion in deciding when the criteria has been achieved.

Under most JCT standard forms there is no definition of ‘practical completion’ (the exception
is the Major Projects Construction Contract (MP)). Where the works (or, as appropriate,
a section) have in the opinion of the architect/contract administrator achieved practical
completion, and the contractor has provided to the principal designer (or, if appropriate, to
the principal contractor) such information as is ‘reasonably required’ for the preparation
of the health and safety file and the ‘as built’ documents have been provided, then
the architect/contract administrator must certify practical completion. Many bespoke
amendments, however, add a definition of practical completion into contracts to introduce
an element of contractual objectivity.

The implication of the JCT standard form approach therefore is that all defects patent at
the point the practical completion certificate is issued will have been rectified or (if an
appropriate amendment is made to the standard form) minor items identified on a snagging
or defects list for rectification shortly thereafter. The drafting in the JCT contract assumes
that the defects rectification period is a period post-practical completion, specifically to
deal with those defects that manifest themselves post-completion. Without a definition of
‘practical completion’, reference has to be made to how that term is defined in case law.
Overall, there are few reported cases on the meaning of practical completion and they
do not provide a clear definition of the term. However, parties often try to mirror their
understanding of the case law on what constitutes practical completion in the amendments
they introduce to JCT to define practical completion. An example of a commonly encountered
definition is that the works are in a state:

‘…which is complete in all respects and free from defects save for any minor
items or minor defects the existence, completion, rectification of which in the
opinion of the Architect/Contract Administrator would not prevent or interfere
with the use and enjoyment of the Works.’

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Where such definitions are used, practical completion is often certified subject to the issue of
a snagging list itemising minor items for rectification.

The definition in JCT MP provides that practical completion takes place where the project
is complete ‘for all practical purposes’ and then lists particular requirements to have been
achieved. These include that the relevant statutory requirements have been complied with
and that

‘neither the existence nor the execution of any minor outstanding works will
affect its use’.

Practitioners should understand the precise significance of practical completion under the
contract. In general terms, the issue of the practical completion certificate signifies that
works have been completed in accordance with the contract and therefore the contractor
has discharged its obligations to carry out the works under the contract.

The contractor should only be expected to undertake remedial work after completion in
accordance with the defects rectification regime in the contract. After practical completion,
any additional works that are not related to the remedying of defects should be instructed
under a new contract and would therefore be subject to their own terms, including the
limitation period that would be applicable to them.

3.1.2 Certifying practical completion: conflicts of interest

Parties to a construction contract should be mindful of the potential for conflicts of interest,
particularly in contracts where the design team has been novated from the employer to
the design and build contractor. In such circumstances, the employer should ensure that it
retains a direct contractual relationship with a representative that is capable of acting on the
employer’s behalf to undertake the certification of practical completion, agree the snagging
list and instruct the rectification of defects that emerge during the defects rectification
period. If the whole design team, including the professional with certifying duties, has been
novated to the contractor, the employer should not use as a certifier the professional who,
following novation, owes duties to the contractor. This can place a strain on the relationship
between the employer and the contractor and will prejudice the employer. The employer will
have no contractual recourse against the novated consultant and the novated consultant will
have no duty to act in the employer’s best interests.

3.1.3 Inviting third parties to rectify defects

Some standard forms expressly provide for where the contractor does not rectify defects.
For example, NEC provides that if the contractor, having been given access, has not corrected
the defect within the defects correction period the project manager then:

‘assesses the cost to the Employer of having the Defect corrected by other
people and the Contractor pays this amount’.

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In the case where the contractor is not given access to correct a notified defect by the
defects date, the project manager assesses the cost to the contractor of correcting that
defect and the contractor pays that amount.

In the FIDIC Red Book, the contract gives employers the option to carry out the work
themselves, or have others do so, where the contractor has not rectified the work within a
reasonable time or by a fixed date. This right is one of the three options employers have in
such circumstances. The other two being the engineer’s ability to determine a ‘reasonable’
reduction in the contract price for the decrease in value of the works to the employer (a
determination that the employer has to carry out in a ‘fair manner’) and the option to
terminate:

‘if the defect or damage deprives the Employer of substantially the whole
benefit of the Works or any major part of the Works’.

Third parties should only be engaged in place of the contractor after a thorough
consideration of the consequences, including contractual consequences, of such action. If
the employer seeks to claim costs for breach of contract, the contractor might argue that
engaging a third party was without valid reason and therefore the employer had not properly
mitigated its losses. If there are specific contractual notice requirements to notify defects,
these must be specifically adhered to. For example, under FIDIC, where the employer is
under an obligation to notify the contractor of defects, they must comply with the notice
periods. Not providing the required contractual notice may mean that the employer’s right to
damages is limited to the cost of the contractor carrying out the defective work rather than
the cost incurred in employing third parties.

The decision to engage a third party should only be made where there is good reason to
do so. This might be because the employer has lost all confidence in the contractor’s ability
to remedy the defects due to its previous track record either during construction itself or
during the rectification period. Another reason might be that, despite its best efforts, the
contractor is simply unable to rectify the defects. Sometimes matters such as contractor
insolvency will mean there is no other realistic option. The option to engage third parties
should however be considered within the overall context of a specific project.

3.2 Latent defects claims

3.2.1 Understanding the right course of action

For defects that emerge after the defects certificate (or equivalent) has been issued
signifying the end of any post-completion defect rectification obligations, and any retention
held is paid, some fundamental issues need to be considered before embarking on the
appropriate course of action. In particular:

• is the recourse available under contract law, tort or a statute (e.g. the DPA)?
• what are the time periods following discovery of the defect in which a claim may be
brought?

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3.2.2 Making claims for defects

When considering making a claim for defective work, a party should first examine the
contractual relationship with the person responsible. It may also be necessary to review any
available right of recourse through security documents such as parent company guarantees
or (less likely post-completion) performance bonds (see the current edition of RICS’
Construction security and performance documents). Alternative options are a claim in tort
or under the DPA. Claims in tort or under the DPA are more difficult to establish than claims
under contract. Where the person who has suffered the defective work is not the person
who originally contracted with the building contractor (or other designer), for example a
subsequent purchaser of a defective building, then the subsequent purchaser will have to
examine whether it has a contractual relationship (or ‘privity’ – see section 2.2.1) on which to
found a claim. Usually, such a relationship would be founded on:

• the benefit of the construction contract having been assigned to the purchaser
• the purchaser having the benefit of a collateral warranty, creating a direct contractual
relationship, or
• the contractor having granted to the purchaser ‘third party rights’ under the Contracts
(Rights of Third Parties) Act 1999.
It is therefore important, when structuring a purchase or a procurement of construction
works, that those with an interest in the completed development have a contractual right of
recourse in the event of defects through one of the means identified above. This illustrates
the importance of collateral warranties and rights under the Contracts (Rights of Third Parties)
Act 1999 that afford a contractual right of recourse in the event of latent defects in a building
in which that party has an interest. Such rights are usually the only way in which tenants,
funders and subsequent purchasers, who would otherwise have no remedy, can establish
rights under contract.

Understanding the appropriate right of recourse (in contract, tort or under the DPA or the
BSA) will require practitioners to weigh up a number of considerations. For example, if the
party suffering from the defective work does not have a contractual relationship with the
party responsible (e.g. a subsequent purchaser who was not given the assignment of the
rights in the building contract or was not issued with a collateral warranty), or if the contract
under which the works were completed simply cannot be found, then alternative remedies in
tort may need investigation.

3.2.3 Limitation periods

Another set of considerations in deciding the most appropriate recourse will be limitation
periods. If a contract was entered into ‘under hand’, or as an oral contract, the limitation
period begins on the date of breach of contract and not the date on which the breach is
discovered. For latent defects this is usually taken to mean the date of practical completion
(anything before then, under the doctrine of temporary disconformity, being a work in

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progress and therefore not a breach of contract). A deed affords the employer a limitation
period of 12 years, from practical completion, in which to bring a claim.

By contrast, in tort, the limitation period is six years from the date on which the harm arising
from the breach actually occurs or manifests itself. That date may not be the date on which
the tort was actually committed. For example, negligent work may have been carried out by
a designer during the construction of the works, but the cracks in the concrete arising from
that negligent work may not occur for some years after the works have been completed.
The limitation period will run from the point when the first cracks occur. This means that,
in certain circumstances, the limitation period under tort could be significantly longer than
under contract. Another potential benefit of tort claims is that, in certain limited instances, a
person claiming in tort may have an additional three-year period that starts from when they
first had knowledge of the damage in which to bring a claim (see section 4.2.3).

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4 Practical considerations (Level

3 – Advising)

4.1 Patent defects

4.1.1 The extent of the duty to investigate defects

Whether or not procedures for managing defects are set out in the contract, the contract
administrator should follow accepted good practice in dealing with them. The contract
administrator must bring defects to the attention of the contractor at the earliest
opportunity so that the contractor has the opportunity to rectify them. This should be
done in writing, and the contract administrator may either use a contract administrator’s
instruction or a specific defect notification form to inform the contractor.

The contract administrator’s instruction is likely to be the most useful tool because it can be
used to identify the defect (and therefore leave the appropriate paper trail for later evidential
purposes). It can also set out the contract administrator’s recommended remedial action
for dealing with the defect. By using the contract administrator’s instruction, the contract
administrator can:

• show that the defect was notified in writing to both the employer and contractor and
• set out timeframes for the contractor to either comply with or dispute the instruction.
In addition, the practical techniques of good contract administration should be deployed. In
the context of defects, these could include:

• keeping logical and detailed contemporaneous records (photographs, sketches, video,

test results, meeting minutes, etc.) so that essential details on location and extent or
frequency of defective work are available
• taking samples to be laboratory tested where appropriate and
• operating the contract payment terms to ensure that proper notices are issued
and monies are properly withheld (e.g. where the Housing Grants, Construction and
Regeneration Act 1996 (as amended) applies, the relevant payer notice or the notice of
intention to pay less than the notified sum takes into account any amounts relating to
defects).
The aim of the types of documents retained should be to arm practitioners with high quality
evidence to demonstrate that the works or services as delivered are not consistent with
the contracted scope of works. An illustrative list of the types of documents that should be
retained is provided in Appendix B.

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If the contract does not have procedures to address defects or their consequences, the
contract administrator or employer typically has several options, which will generally include:

• requesting that the contractor rectifies the defect at no cost to the employer
• accepting the defect or defective materials and deeming them acceptable (this may be
possible where the defect and its consequences are minimal and the employer is under
time pressure to get the building finished and in service) or
• (if a defect is not apparent in all areas) prior to requiring remedial action, asking the
contractor to carry out a process of opening up works to identify if the defect is present
elsewhere.
Contract provisions should be consulted before embarking on any particular route to deal
with defects. The contract administrator should check whether there is provision for opening
up works in the specification or its preliminary sections.

Investigations to discover whether there are defects can be a costly process. The
costs of such investigations may have to be apportioned in any resulting dispute. The
apportionment will not only take into account ultimate liability for the defects found but
also the reasonableness of approach to the investigation of defects itself. In one case,
McGlinn v Waltham Contractors [2007] EWHC 149 (TCC), the judge illustrated the principle of
reasonableness by stating:

‘It is difficult to justify spending £687,000 [on investigations] in order to decide

whether or not to spend £870,000 on remedial works’.

The approach to defects should be reasonable in the context of the scale of the alleged
defects. For example, a complete stripping of the roof may be unjustified on the basis of the
evidence existing at the time of the initial investigation. There ought to be some reasonable
grounds for suspecting defective work before opening up is undertaken. Any opening
up should be such that reasonable reinstatement/remedial work can be undertaken.
Non-intrusive techniques such as infra-red thermography or ground penetrating radar
should actively be considered. It is always preferable to avoid future disputes as to the
reasonableness of any investigation by reaching agreement (where possible) with other
parties before proceeding.

4.1.2 Risk in relation to defects caused by fire and water

Often defects can arise as a result of, or can be caused by, particular risks. Two of the most
common are fire and water. Such risks may be intervening events which are not attributable
to defective design, workmanship or materials. Practitioners should therefore be alive to
such risks and ensure that they are covered off by appropriate insurance. In particular, all
parties should be clear about the point at which under a particular contract responsibility
for insuring the works passes back to the employer. Under JCT, this usually happens at
practical completion. On the hand-over of a project, practitioners should advise employers
are to ensure that the appropriate coverage for the contents and structures is maintained,
particularly against the risk of water and fire damage.

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4.1.3 The option to terminate and other remedies

Although some forms provide specifically for termination in the event of contractor failure
to remedy defects (e.g. FIDIC) and others contain provisions for terminating where the
contractor fails to proceed ‘regularly and diligently’ with the works, termination should be
approached with extreme caution and with the appropriate legal advice.

If the termination were to be challenged in the courts as not in accordance with the contract,
or not permitted by one of the termination events, the employer’s financial exposure
for wrongful termination or repudiatory breach may be significant. Note also that some
contracts provide for the termination of the contractor’s employment under the contract,
as they will still have obligations under the contract itself, particularly with regard to the
standards of materials and workmanship.

Other options to explore in appropriate circumstances may be calling on a parent company

guarantee or (if it is available) the performance bond. These are discussed in more detail in
the current edition of RICS’ Construction security and performance documents.

4.2 Latent defects

4.2.1 Contractors’ responsibilities

Although the concept of latent defects implies discovery of defects long after the works
have been completed, latent defects can of course arise a short period after the defects
certificate has been issued. Where contractors have completed all their obligations under
the contract, including those during any defects rectification period, they are unlikely to be
under any contractual obligation to remedy any latent defects arising. In such circumstances,
the practitioner, in investigating the available remedies, should not discount the possibility of
inviting the contractor to return to remedy the defects. Provided that, evidentially, it is clear
the latent defect is the responsibility of the contractor, it would be in the contractor’s best
interests to co-operate as remedying the defects is likely to be significantly more economical
than defending a claim for breach of contract. This also has the added benefit of enabling the
employer to effectively mitigate its losses arising from the contractor’s breach of contract.

4.2.2 The role of limitation periods

There may be particular circumstances in which more detailed investigation is required into
when a cause of action actually arose in order to determine whether there is still time to
bring a claim in relation to latent defects that are discovered some time after completion.

4.2.3 Advising on limitation periods under contract

In the case of claims for defects, claims should be brought primarily in breach of contract
and (to a more limited extent) in tort or under the DPA or the BSA. The important starting

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point therefore is to consider whether the action being contemplated is founded in contract,
tort or in statute.

An action for breach of contract must be started within six years from the date on which
the cause of action accrues. In contract, the date on which a cause of action accrues is the
date of breach. This can raise some difficulties when trying to determine when exactly the
breach occurred if considering a claim against a contractor for completion of defective work.
The case law suggests that the limitation period for defects in works runs from the date of
completion or purported completion and not from the earlier date when the defective work
may actually have been carried out.

The actual date on which the cause of action accrues is likely to be fact sensitive, and expert
legal advice should be sought to determine such issues (particularly when an action is
contemplated close to the end of a limitation period). Where a cause of action arises against
a designer, the cause of action may accrue when the design is first prepared or when the
production information is first issued, although the actual moment when the cause of action
accrues will depend on the facts. A further cause of action could accrue if the designer
reviewed the design at a later stage during the works.

When defective work has been carried out by a designer, a cause of action may accrue
against them at the point in time they ought to have, but failed to, identify the defect in
question.

If a claim is brought under a particular type of clause under which one party has agreed to
indemnify another against a particular type of loss, the limitation period for a claim under
that indemnity could in practice be longer than for breach of contract generally. This is
because the general position in relation to claims under indemnities is that the cause of
action does not arise until the loss has been established or incurred. The establishment of a
loss could be much later than the actual breach of contract, so the point from which the time
starts to be counted in relation to indemnities could well be much later. Claims contemplated
under indemnities should be given particular consideration and the potential significance of
indemnities should be considered when contracts are being negotiated.

Where a contract is executed as a deed, the time period in which to bring an action is
extended to 12 years from when the cause of action accrued but the rules outlined above
continue to apply. Extending the contractual limitation period is a key reason why many
employers insist that contracts are executed as deeds rather than as simple contracts.

In commercial contracting relationships, parties are free to agree shorter or longer limitation
periods to those set out in the Limitation Act 1980. It is worth noting, however, that where a
shorter period is provided for in one party’s standard written terms of business for bringing
claims in breach of contract, that agreement could be subject to a test of reasonableness
under the Unfair Contract Terms Act 1977. Generally, where two commercial parties of equal
bargaining strength have agreed to a shorter limitation period, the courts are unlikely to
intervene.

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Parties are free to vary the statutory limitation periods. Where contracts are entered into
as deeds, and particularly given the uncertainty in law as to whether a contractor can be
in breach of contract before practical completion (see section 2.1.1), parties often include
an express limitation provision in their contracts. These are usually along the lines that
‘the liability of the contractor under this contract will expire after 12 years from practical
completion of the works’. Using such wording is a sensible way of ensuring certainty in
limitation periods that the courts are likely to uphold.

4.2.4 Advising on limitation periods under tort

Early legal advice should be sought where claims in tort are contemplated. Claims in tort
will commonly be considered where the ‘victim’ of defects has no relationship with the
contractor, for example a subsequent purchaser or where the limitation period in the
contract has expired. Claims for defects under tort can be difficult to establish.

At first sight, the tort limitation period looks the same as that for contract: six years from the
date on which the cause of action accrues. The similarity is deceptive as, in tort, the cause of
action accrues when the actionable damage, harm or loss occurs. There could be a significant
time-lag between when the tortious act is committed and when the damage occurs. In the
case of negligence claims, where damage must be established, the cause of action accrues
when the physical damage occurs and not when the negligent act is committed, if the
damage does not occur at the same time. This will be the case even if the damage that has
been suffered is not actually discovered or reasonably discoverable.

The rule on tort limitation periods gives rise to difficult issues, as the rule is applied to
different types of tort that might be relevant to defective construction. One particular kind of
tort is that of ‘negligent misstatement’ (see section 2.2.1), which might, in particular, apply in
the case of defects caused by designers. Any concerns about limitation periods in such cases
will be particularly sensitive to the facts and should be explored with the aid of expert legal
advice.

It is also worth noting that the Latent Damage Act 1986 amends the Limitation Act 1980 (by
inserting ss. 14A and 14B into the Limitation Act 1980). It extends the period in which claims
can be brought in tort for negligence (not involving personal injury) by three years, starting
from the date when the facts relevant to the cause of action (i.e. the latent defect) became
known or could reasonably have been discovered. This is subject to an overriding time limit
for actions in negligence of 15 years from when the cause of action to which the damage is
alleged to be attributable first accrued.

This means that a claimant who has no knowledge of tortious damage (e.g. suffering a
latent defect), who is therefore not able to bring a claim within six years from when damage
was actually suffered, has an additional three years in which to bring a claim provided that
the claim is made within an overall 15-year period from when the original cause of action
accrued.

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There is little case law on the application of this extension provision. To give an example:
where a chimney has suffered damage attributable to the specification of inadequate
concrete, and that damage (due to the lack of visibility of the damage) was not discovered for
the period of six years from when it manifested itself, under the Latent Damage Act 1986, the
claimant would have a further period of three years from when the claimant knew or ought
to have known the material facts about the loss suffered, the identity of the defendant, and
its cause of action (that is, knowledge that the loss is attributable to some degree to the act
or omission that is alleged to have constituted the negligence). However, that period of three
years is subject to a long-stop of 15 years from the date when the original act or omission
on which the claim is based first occurred. Therefore, if the claimant gained the requisite
knowledge of the damage to the chimney 14 years after the original act or omission on which
the claim is based first occurred, the period in which to bring the claim would be one year.

The role of the Latent Damage Act 1986 should not be over-emphasised. Commentators
suggest it applies primarily to claims in tort arising from negligence. Also, it does not operate
to extend limitation periods in contract. As claims in tort for latent defects arising from
negligent damage to the ‘thing itself’ (following Murphy v Brentwood DC [1991] 1 AC 398) have
been restricted (see section 2.2.1), the ability for claimants to benefit from the additional
three years is limited in practice. However, any particular circumstances in which the benefit
of the extended limitation period is being sought should be carefully considered against the
known facts and expert legal advice should be sought.

4.2.5 Claims under the DPA

A claim under the DPA accrues from the time when the dwelling is completed. The limitation
period is six years from that date. If subsequent work is done, then the limitation period
for that subsequent work is from the completion of that work. As a claim under the DPA
is a claim founded on a statute, the length of the limitation period should not be affected
by whether the contract under which the works were carried out was signed as a deed or
executed under hand.

As before, reference should be made to the amending provisions of the BSA in respect of the
operation of the DPA.

4.2.6 Extending limitation periods in cases of fraud, concealment or

mistake
Whatever a limitation period might be, it may be extended in cases where the action is based
on the fraud of the defendant, where any fact relevant to the claimant’s cause of action
has been deliberately concealed by the defendant or where the action is for relief from
the consequences of a mistake. The limitation period in such cases begins from when the
claimant discovers the fraud, concealment or mistake or could, with reasonable diligence,
have discovered it. It should be noted that this is the basic position under section 32 of the
Limitation Act 1980 and the application of the law in such cases is complex and fact-sensitive.

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Appropriate professional advice should be sought where the facts of the case suggest that
such issues will be relevant.

4.2.7 Practical considerations

All parties involved in construction should develop systematic methods for storing
construction-related documents such as construction contracts, collateral warranties and
parent company guarantees. These should be retained for at least the duration of the
appropriate limitation period. Professional indemnity insurers will also prescribe particular
storage requirements for the duration of the period when the insurer might receive claims.
Those requirements should be adhered to. Ready access to original documents will be
invaluable in determining the available recourse for parties where latent defects emerge.

4.2.8 Latent defects insurance

Latent defects insurance is increasingly available to cover the cost of rectifying defects that
emerge post-completion. Such insurance can cover defects arising from workmanship or
design. The principle underlying such policies is that defects must be undiscovered at the
time of practical completion. Policies can cover whole buildings or individual elements, such
as the roof.

Key advantages of such policies are that they react to material damage and pay-outs are
not consequent on proving negligence or breach of contract by the original contractors or
designers. They also avoid the complications inherent in considering whether the person
who has suffered from a defect has a contractual right of recourse. Therefore, they avoid
some of the uncertainties in bringing defects claims. A common example in the UK of such
policies is the National House Building Council (NHBC) warranty for new build houses.

Commercially, such policies can be expensive and often have a large excess. They are, of
course, also subject to the law around insurance policies relating to ‘utmost good faith’
(non-disclosure) or misrepresentation. Therefore, insurers may not respond to claims where
they can establish that material information was not disclosed at the time the insurance was
placed. There can be substantial costs associated with setting up such policies, as insurers
may wish to manage their risk by actively monitoring the design and construction.

4.2.9 Limiting or excluding liability

Contractors wishing to limit their exposure to liability for defects should consider drafting
caps on their overall liability under contract and tort and also seek to specifically exclude
certain potential liabilities. This may be of particular concern where, some time following
completion of the project, a latent defect causes further damage to occur. In such cases, the
resulting loss might be of a type that could be characterised as ‘consequential’, indirect loss
or loss of revenue.

Contractors will usually try to limit or exclude liability for such losses. For example, in
the case of a defective office building, the developer loses rental income because the

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development is not capable of occupation due to latent defects. In addition, the developer
may suffer a claim from its tenant for the cost of moving out and paying higher rent for
alternative temporary premises. A contractor will be keen to limit its exposure to such losses
by ensuring it is only liable for the direct cost of remedying the defects. The developer would
have to ensure that it has in place insurance for the loss of such income.

The courts apply particular rules when interpreting such clauses when their meaning is
in dispute. Where the wording is ambiguous, such clauses will be interpreted against the
party seeking to rely on them. In addition, limitation clauses might be subject to the test of
reasonableness under the Unfair Contract Terms Act 1977. Such clauses should be drafted
with care to ensure that they limit or exclude the sort of liability that the parties intend to
limit or exclude.

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Appendix A Summary of
limitation periods
Trigger to start Length of
Cause of action Statutory reference
limitation period limitation period

Simple contract Date of breach (in 6 years Limitation Act 1980 (LA)
construction contract
LA, s. 5
usually on ‘practical
completion’)

Deed Date of breach (in 6 years LA, s. 8

construction context
usually on ‘practical
completion’)

Tort Date damage is 6 years LA, s. 2

suffered (even if not
discovered)

Defective Premises Completion of the 6 years DPA, s. 1(5)

Act building

1972 (DPA)

Building Safety Act Completion of the 15 years

2022, as amending building
the DPA

Latent damage Later of: • 6 years LA, s. 14A

• date when the • 3 years (as inserted by the

damage occurred or Overriding time Latent Damage Act
limit: 15 years 1986)
• date on which
the claimant first from the date
had both the damage or loss
knowledge required was originally
for bringing the suffered (LA, s.
action and the right 14B)
to bring such an
action

Defects and rectifications

27
IP

Appendix B Example list of

records to be kept
The types of records to be kept to evidence defects and investigations carried out include:

• contract administrator’s instructions (including variation instructions)

• general correspondence relating to defects and defective work (e.g. email exchanges)
• minutes or notes of site meetings, progress meetings
• investigation logs and reports
• drawings and specifications showing or describing the works
• any planning trackers, building regulations trackers or similar working documents
• cash-forecasts and similar cost-related documents
• specialist reports
• test certificates
• visual evidence (photographs, film and drone footage)
• certificates (e.g. payment certificates, pay less notices)
• health and safety file
• practical completion certificates
• snagging lists
• maintenance records for the property
• certificates of making good defects and final certificates and
• documentation relating to any insurance claims.

Defects and rectifications

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