Disputes over construction defects are all too common in the industry. In many cases, it’s not always clear whether an issue qualifies as a defect, how serious its impact might be, or what steps should be taken to resolve it.
In this article, we explore your rights and options when construction work falls short, how we can help protect your investment, and hold third parties accountable.
If you are currently dealing with a construction dispute and you are not sure where you stand, our commercial property dispute solicitors are on hand to review your situation and advise on your next steps.
Contents:
- How are defects legally defined?
- What is the difference between latent and patent defects?
- Who can be held liable in construction defect claims?
- How are defect claims resolved in the construction industry?
- What are your options for resolving this type of dispute?
- What are the most common defences used in defect claims?
- How long will it take and what are the implications for the project?
- Is there a time limit for making a defect claim?
- What happens if you are successful with a defect claim?
- Summary
How are defects legally defined?
Defects in construction generally refer to work that falls short of the requirements or specifications set out in the contract. This can include faults with workmanship, materials, or design leading to all sorts of problems. Common examples include issues with water intrusion, structural integrity, roofing, plumbing and electrical systems etc.
The contract itself sometimes defines what amounts to a defect (although surprisingly not very many do). For example, the NEC4 suite of contracts provides a defect to be: 'a part of the works which is not in accordance with the Scope'. In the absence of a defined term in the contract, the law recognises a defect as work which is not fit for its intended purpose when used reasonably. Unfortunately, this can leave room for interpretation as to whether something does or does not deviate from a certain standard, is fit for purpose, or has been performed in a proper workmanlike manner. Expert evidence is usually needed. To add further complexity to the mix, work doesn’t necessarily have to be completed ‘poorly’ in order to amount to a defect. Something can still amount to a defect if it fails to meet a particular specification in the contract, even if carried out with all due care and skill.
It's important to note that dissatisfaction with things like the contractor’s level of diligence or quality of finish alone doesn't constitute a defect. In general, you will need to demonstrate that what was produced fell below the standards/specifications required, for example, there is a tangible or measurable difference between what was contractually agreed compared to what was delivered, not just whether work could have been done 'better' or there’s potential for improvement. This is why early legal advice from commercial property dispute lawyers is important: to assess whether what you’re dealing with is a true defect, and if so, what your options are.
What is the difference between latent and patent defects?
Defects are commonly classified into two categories: patent and latent.
Patent defects are generally those that can be discovered on reasonable inspection by a skilled party such as an architect or engineer (it may not be apparent to a casual observer). It can include things like:
- Cracks in walls, tiles, or ceilings
- Uneven, sunken, or bowing flooring or ceilings
- Improper installations
- Damaged or missing items , paint or woodworks
- Misaligned or faulty windows or doors
Latent defects, on the other hand, are hidden or ‘concealed flaws’ that are not detectable on reasonable inspection (even by those searching with the requisite level of skill and care). The effects of latent defects may not manifest for many years, often when the issue causes substantial damage or performance failure. Latent defects can include things like:
- Structural weaknesses in foundations
- Defective waterproofing or insulation
- Hidden corrosion in steelwork
- Poorly installed pipework within walls
The difference between latent and patent defects is more than just technical, it has significant practical and legal implications for how and when a defect can be addressed. In practical terms, a defect can only be rectified once it becomes patent, or in other words, visible and apparent. Most standard form construction contracts contain mechanisms for rectifying patent defects during the defects liability or rectification period (usually 6-12 months after practical completion but can be longer). Latent defects, which remain hidden for many months or even years, often lead to more complex and costly legal issues. These can include:
- Proving causation—gathering evidence to show who was at fault and when the defect arose.
- Time limits—determining whether the claim is still within the legal time frame to be brought
- Legal route—assessing whether a claim can be made under contract law or if other legal avenues (such as tort, warranties, or insurance) must be explored.
In contrast, patent defects tend to be more straightforward. Those identified before practical completion (or snagging works) should be dealt with before the certificate is issued. Anything discovered during the defects liability period can be rectified in accordance and with the protection of the terms of the contract. This usually involves instructing the contractor to return to the site and rectify the defects, and retention monies are often also held during this period. Once this period has expired, such power is lost.
Who can be held liable in construction defect claims?
Anyone involved in construction projects knows that multiple parties are often involved to bring the project to life. But who can you hold accountable for defects? This will very much depend on the nature of the defect and the root cause. Liability can fall on one party alone or can be the result of several parties contributing to the same defect. In the latter situation, you may claim against any one of them for the entire loss under the principle of joint and several liability. This can be especially useful if one party is insolvent or unable to meet their share. That said, some contracts include a net contribution clause, which limits a party’s liability to a 'fair' proportion of the total loss—effectively overriding the default position.
For now, let’s take a look at who may be held liable and why:
Contractors, Subcontractors, and Professional Team (Architects, Engineers, Consultants)
Contractors are typically the first port of call for defects in workmanship or failure to complete the works to the specified standard as set out in the contract. If not expressly stated in the contract there is also an implied duty to perform works with reasonable skill and care. Depending on the circumstances (including level of oversight and agreed terms) main contractors can also be held liable for the work of subcontractors they have appointed.
Design professionals also normally have a duty to exercise reasonable skill and care in preparing and overseeing the design. If a defect arises due to design errors or omissions—such as faulty structural calculations or flaws in design specification —they can also be held liable.
Product Materials Manufacturers and Suppliers
Where a defect stems from faulty materials or products, manufacturers may be liable to those who they have supplied goods to under contract or product liability laws. They can also be held liable if the defective material or product causes property damage or personal injury.
Personal liability
In general, liability sits with the company or organisation responsible for the work. Although, individuals such as company directors, consultants, or sole traders may be held personally liable in certain situations—for instance, if they acted negligently, committed fraud, or assumed personal responsibility in the contract.
How are defect claims resolved in the construction industry?
Strong evidence is critical to a successful claim. You need to showcase that the work has deviated from what was required, reasonable skill and care hasn’t been used in executing the works, or materials supplied were faulty or substandard (depending on your specific circumstances). Key documents may include:
- The construction contract and any related specifications or drawings
- Site records (including photographs, inspections, maintenance records, and progress reports)
- Snagging lists and completion certificates
- Expert reports (e.g. structural engineers or surveyors) and witness accounts
- Correspondance between parties (emails, letters, instructions, etc.)
- Warranties and guarantees, including manufacturer documents
What are your options for resolving this type of dispute?
Construction defect claims are usually resolved through a mix of contractual processes, alternative dispute resolution (ADR), and, where needed, legal action. The journey often starts with the defects liability period (DLP), during which the contractor is given the opportunity to fix any issues. If the DLP has lapsed or problems persist, the parties may try to settle matters through:
- Negotiation – Often the quickest and cheapest route. Many disputes are settled directly between parties.
- Mediation – A non-binding, confidential process involving an independent mediator. Useful where parties want to preserve the working relationship.
- Adjudication – A fast-track process, typically resolved within 28 days. This is unique to the construction industry and mandatory if the process is invoked by one party.
- Arbitration – A private, binding resolution method, often used in higher-value or international contracts.
- Litigation – Formal court proceedings. Usually a last resort due to time and cost, but necessary for serious or unresolved claims.
For high-value claims with complex issues and where stakes are high – more formal and comprehensive methods like adjudication or arbitration might be more suitable. A binding decision (even if in the interim as a result of adjudication) can give you peace of mind. For smaller claims, the cost-to-benefit ratio may outweigh pursuing more expensive and lengthy forms of dispute resolution. That said, each case turns on its own facts, and it is best to seek the advice of experienced commercial property dispute solicitors before proceeding.
If you’re facing a construction-related dispute, specialist routes like adjudication come into play. We explain the full process in our adjudication guide.
What are the most common defences used in defect claims?
- No breach – Contractors or professional teams may argue the work met contractual standards or specifications.
- Failure to notify – They may argue you failed to follow the notification procedures under the contract (for claims that can be rectified during DLP).
- Contributory negligence/Third Party responsibility – Claiming the employer or another party caused, contributed to, or is responsible for the defect.
- Time-barred – The claim was brought outside statutory limitation periods (for latent defects / claims pursued after DLP has lapsed).
- Design change or approval – Alleging the defect arose due to design changes or because you as the employer approved the work.
How long will it take and what are the implications for the project?
This really depends on the willingness and stance of the other party to negotiate and reach a solution. If robustly contested and matters end up in court, you might be there for quite some time. If adjudication is used and an interim decision is arrived at within 28 days, everything can be resolved relatively quickly. The implications very much depend when the defects are discovered. If there is a dispute about whether something does or does not amount to a defect, this could potentially hold up practical completion, lead to disruptions, construction delay claims, and cost overruns. Issues discovered after completion, depending on their severity, impact, and time taken to rectify may impact your ability to sell, rent or use the building or realise your investment. There is also the risk of reputational damage, especially where usability and safety effects end users. With such high stakes, it is important to engage the help of experts as early as possible to advise on the best way forward.
Is there a time limit for making a defect claim?
Once any defects liability period has lapsed, contractors aren’t free from liability. Any claims made are subject to time limits.
The time limit depends on the legal basis of your claim:
For contractual claims it is 6 years from the date of the breach (usually practical completion) for contracts signed under hand (standard contracts). And 12 years if the contract was executed as a deed (common for larger or high-value projects).
For tort claims it is also generally 6 years from the date the damage occurred. If the damage wasn't immediately obvious (e.g. latent defect), there may be an extension of up to 3 more years from the date you discovered (or could reasonably have discovered) the defect—subject to a longstop of 15 years from the date the negligence occurred.
Defective Premises Act 1972
Applies to dwellings rendered unfit for habitation due to defective works. The time limits for claims (previously 6 years) was significantly extended in 2022 thanks to the Building Safety Act to:
- 15 years from the date the work is completed for prospective claims ie work completed after 28 June 2022
- up to 30 years after the completion of the work for retrospective claims ie work completed before 28 June 2022
Since defects, in particular latent defects, might not appear for years after completion – it is important to keep document and keep evidence on file should they manifest and you are still within the statutory limits for making a claim.
What happens if you are successful with a defect claim?
The first thing to point out here is that if there is DLP which confers a right on the contractor to return and remedy the works – they should be notified and allowed to do so. If you ignore this and bring in others to complete the works, you may be limited to recovering what it would have cost the original contractor to carry out the remedial work.
In general, if you are successful with a defect claim, the remedies available are usually: damages or specific performance. Damages are the most common form of remedy in the form of monetary compensation. Under contract, the calculation of damages is focused on putting you in the position you would have been in if the work had been done correctly (for negligence, this is the position you would be in had it not occurred). The standard measure is the cost of repair or rectification to fix the defect. If the cost of repair is disproportionate or impractical, damages may be based on the diminution in value of the property. You may also be able to claim for any additional or consequential losses suffered due to the defect, such as loss of rental income or business disruption. These losses must be clearly connected to the defect and proven with evidence.
The court may also order specific performance, where it compels the contractor to rectify their defect, but in many cases, the owner would have gone ahead and done this anyway, especially as you have a duty to mitigate your losses. For example, it may be difficult to argue to recover loss of rent for premises that could have been let but for the defect if you simply did nothing and allowed your losses to mount up. In such cases, it may be wise to employ alternative contractors to remedy the works unless you can’t afford to do so.
It is also worth noting that while a favorable judgment means the court has recognised your right to compensation or remedial action, it does not automatically result in the money or work being carried out. You may need to take additional steps to enforce the judgment (ie ensure the losing party fulfils the court order). Sadly, enforcement proceedings can add further cost and delay but it may be necessary.
Summary
Disputes over defects in construction projects can quickly escalate, stall projects, damage reputation, and eat into profits. If you're on the verge of or currently in dispute over construction defects, we can help. Harper James has the expertise to assess the situation quickly, determine the strength of your claim, and guide you through the resolution process with minimal fuss. Our goal is to help you protect your investment and move forward with confidence. Contact our commercial property dispute solicitors today.
