Defects in London Construction Projects: The Defects Liability Period Explained

Construction defects are one of the most common sources of dispute between London homeowners and contractors. Understanding what a defect is (and what is not), how the defects liability period works, and what rights you have when a contractor fails to remedy defective work helps homeowners manage this phase of the project confidently.

In construction contract terms, a defect is work that does not conform to the specification, drawings, or good workmanship standard required by the contract. A defect is not:

• A variation (a change to the original scope that the client requested during the works)
• Fair wear and tear (normal deterioration of materials over time)
• Damage caused by the client or third parties after practical completion
• A design failure where the contractor built exactly what the drawings specified (though the contractor may have a duty to warn of an apparently defective design)

Examples of typical defects in London residential construction:

• Roof membrane improperly lapped, leading to a leak
• Plaster finishing below the standard required by the specification
• Poorly fitted kitchen units with gaps at joints
• Electrical or plumbing installation that does not meet Building Regulations
• Cracked render applied in frost conditions in breach of good practice
• Brickwork below the required standard of coursing and face quality

The defects liability period (also called the rectification period in JCT contracts) is a defined period -- typically 6 or 12 months from practical completion -- during which the contractor is obliged to return to the site and remedy any defects that appear. During the defects liability period, the homeowner can notify the contractor of defects; the contractor is obliged to rectify them within a reasonable period.

At the end of the defects liability period, the contract administrator (or QS, or the homeowner) prepares a schedule of defects listing any outstanding items. The contractor must remedy these items before the final certificate (or defects certificate) is issued and the final retention payment is released.

Practical completion is the point at which the works are practically complete -- that is, the project is fit for use and occupation even though minor items may remain. Practical completion is certified by the contract administrator (typically the architect) in most standard JCT contracts. On simpler residential projects without a formal contract administrator, practical completion is often agreed between the contractor and the homeowner.

At practical completion:

• The client takes possession of the works
• The defects liability period begins
• Half the retention is released (in a contract with retention)
• The contractor's risk (and contract works insurance obligation) ends and the homeowner's responsibility begins

Practical completion should not be certified (or agreed) where there are significant outstanding items. Minor snagging items that do not prevent occupation do not prevent practical completion, but significant structural, waterproofing, or functional deficiencies should be resolved before practical completion is accepted.

"Snagging" is the informal term used for the list of minor incomplete or substandard items that are typically addressed in the final stages of the works or during the defects liability period. In contract terms, snagging items are defects in the formal sense, but the term "snagging" implies items of lesser significance than a major structural or waterproofing failure.

Where the contractor fails to remedy notified defects within a reasonable period, the homeowner's remedies depend on the contract:

1. Set-off against retention: where retention is held, the homeowner can set off the reasonable cost of remedying the defect against the retention payment. The homeowner should issue a proper pay less notice specifying the amount of the deduction.

2. Employ another contractor: where the original contractor fails to return, the homeowner can employ another contractor to carry out the remedial works and recover the cost from the original contractor.

3. Adjudication or litigation: for significant disputes about defects and their cost, adjudication (under the HGCRA 1996) or litigation (in the county court or High Court) may be necessary.

4. Latent defects and the Limitation Act: the standard limitation period for a breach of contract claim in England is 6 years (or 12 years if the contract is executed as a deed). This means that defects that become apparent after the defects liability period has ended may still give rise to a claim, provided the claim is brought within the limitation period.

• Carry out a thorough snagging inspection before agreeing to practical completion
• Put defects notifications in writing (email is fine) and keep a record
• Do not release the retention payment until all notified defects have been remedied
• If the contractor refuses to return to remedy defects, seek legal advice before employing another contractor to do the remedial works

rcbGroup operates a structured defects management process. We carry out an internal pre-handover inspection before inviting the client for their practical completion walkthrough, and we take prompt action to remedy any notified defects during the defects liability period.

Contact our team to discuss your project.