Notification of Defects under a Construction Contract for a Residential Project

February 20, 2020

in Building & Construction,Property

This is the first in a series of short articles about what you can do when you have had building work done to your home (or residential investments, or bach), and after it’s finished you start to notice issues with the work.

In this article we are talking about contracts, and the extremely short point is that it all depends on the contract.

One provision that is fairly standard in construction contracts is something called a defects liability period.

Now, those of you who have some familiarity with the Building Act will know there are some rights and entitlements on this topic under that Act. We will be devoting one of our next articles in this series to those.

A defects liability period is an amount of time – often a year – during which if you notice anything wrong with the work done by your contractor(s), or the materials they used, you can notify them of what is wrong and they must put it right at their cost.

Now we are only talking about under a contract for the moment, so the exact way a defects liability provision works will depend on exactly what the contract says.

Generally notice is to be in writing – you should really do that anyway, so that you have a written record to rely on if the need arises.

Something that may or may not seem obvious when we say it, is that the defects liability period only governs the time in which you have to give notice, to create the obligation for the contractor to fix the defect. It does not mean that anything that is not agreed, and/or fixed, during that time falls away and the contractor is no longer obliged to fix the defect.

Put another way, as long as you notify the defect during the defects liability period, it doesn’t (generally) matter if it takes another 18 months to sort-out an argument about the contractor being responsible for the defect; when it is established/agreed that they are responsible, because the defect was notified during the defects liability period they must fix it.

Obviously, as we have already said, this is all dependent on your particular contract, but it is common enough to be worth understanding. If you have a contract already, you should make yourself familiar with its terms. If you are considering one you haven’t signed yet, you should be careful to make sure the defects liability period works for you. In either situation, if you would like some help give us a call.

Before signing-off would should note that if you don’t discover a defect until after the defects liability period is over, all is not lost. You still have rights, and you can still do something about them. We can talk about this more, later in the series.

If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:

Wallace Revell
09 379 0055

The information contained in this publication is intended as a guide only.  It does not constitute legal advice and should not be relied upon as such.  Professional advice should be sought before applying any of the information to particular circumstances.  While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.

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