What happens during the defect liability period?

A defect liability period follows the practical completion of a construction project. This article explains your contract administrator’s role during this period.

The project manager is fundamental to a construction project, holding the instrumental responsibilities of coordinating the logistics and day-to-day running of the project and managing the relationships between the client, contractor, and any other consultants or stakeholders.

The project manager’s role includes organisation, planning, coordination, communication, budget control, and contract management. And it is a role that continues beyond the completion of the project with essential duties to complete during the post-construction defect liability (or rectification) period.

What is the defect liability (or rectification) period in construction?

After a construction project has been completed, it is commonplace for there to be a defects liability period – a fixed period of time when the contractor is liable to resolve any defects or problems with the building works that arise following practical completion.

The defects period is agreed upon under the building contract, it begins on practical completion (when the construction is certified as practically complete) and usually lasts from a few months up to a year.

Depending upon the size and complexity of the project, practical completion may be certified at different times for different aspects of the development meaning that the defects period is different for separate trades on the project.

The defects period protects both the client and the contractor – it gives the client a guaranteed way in which any arising snagging in the property is resolved, and it provides the contractor with a buffer period to resolve any defects directly with the client.

The project manager’s role during the defects period

It is the responsibility of the administrator of the building contract (often the project manager) to confirm that all works in the contract have been carried out, and that the building is ready for occupation by the client. The project manager or contract administrator will then issue a certificate of practical completion and other relevant project documentation such as the health and safety file and building owner’s manual. The client will then be obligated to pay the contractor a percentage of their retention and entitled to hold the remainder until after the defects period.

It is the role of the project manager (if acting as the contract administrator) to put in place defects reporting procedures. During the defects period, the client can report any defects to the project manager. It is the project manager’s responsibility to establish if they are defects that need to be rectified.

The project manager will arrange an inspection of works, and if they deem the client’s concerns to be justifiable defects, they will collate and issue a schedule of defects and coordinate arrangements between the client and the contractor to rectify those defects within an agreed timeframe.

What happens at the end of the defect period?

When the agreed timeframe to rectify the schedule of defects is complete and all defects have been resolved, the project manager will issue a Certificate of Making Good confirming that the contractor has resolved the defects. The Final Certificate can then be issued by the contract administrator ending the defects period. The remainder of any retention money held by the client can be paid to the contractor.

If the contractor fails to rectify the defects within the agreed timeframe, alternative contractors may be employed to complete the defect works with their cost deducted from the retention funds.

What if problems arise after the defects period?

If problems arise after the defects period, no contractual rights or obligations are in place to rectify defects. Instead, the client can claim damages for factors such as defective workmanship within the timeframes outlined in the Limitation Act 1980 – this timeframe varies according to the case – generally, claims for negligence must be issued within 6 years of the date of damage occurring but the Building Safety Act 2022 has extended limitation for certain construction claims.

Using a thorough and reputable project manager ensuring high standards of construction and workmanship should safeguard against such post-defects period problems and structural warranties can provide further protection for the longer term.

For residential properties, insurance such as the NHBC’s (National House Building Council) 10-year Buildmark warranty covers any structural problems arising and commercial property warranties offer protection for non-residential buildings.

How Evolution5 can help your construction project

Evolution5 is a professional consultancy offering project management, contract administration, and employer’s agent services for projects across London and the South East.

When you appoint Evolution5 as your project manager and contract administrator, you benefit from the wealth of experience our consultants have in providing this role across various project types and sectors. You are allocated a dedicated resource with experience, knowledge, and background to support the specifics of your project to maximise the return on your investment and achieve a high-quality end product.

If you have a construction project and want to explore how the team can help you, click the below button or call 023 8040 5073.

Find out more about Evolution5’s project management service

Find out more about Evolution5’s contract administration service