Longer periods to bring a claim for defective premises

Written by Michelle Dixon, Partner

On 28 June 2022 the Building Safety Act 2022 (‘BSA’) implemented longer limitation periods for claims under the Defective Premises Act 1972 (‘DPA’).

Limitation means the period within which a party to a contract or a party who has suffered damages as a result of another party’s conduct, must bring a claim.

Defective premises means the construction of a dwelling that is unfit for habitation, because of say actual defects that are not safe or cause distress or inconvenience to occupants.

The BSA amends the limitation period for DPA claims from six years to 30 years retrospectively for dwellings completed before 28 June 2022, or 15 years for dwellings due to be complete after 28 June 2022.

The BSA also introduces a new potential cause of action, with a new 15 year limitation period, against any business who “takes on work in relation to any part” of a dwelling. This effectively will now cover all existing building work, such as refurbishment or an extension, which accrue after 28 June 2022.

Claims could also be brought against a parent or sister company – if it is just and equitable to do so, the courts can make a Building Liability Order to extend liability to a group company if, for example, a special purpose vehicle company was created specifically for the project.

These longer limitation periods create an opportunity for dwelling owners who may otherwise have been out of time to bring a claim and pose a risk of claims to contractors and those with design responsibility such as architects and structural engineers.

The professional indemnity insurance market has restricted cover since the Grenfell tragedy and subsequent scrutiny of fire safety, so claims that could now potentially be brought (say, relating to historic fire safety issues that render the dwelling unfit for habitation) could result in professional consultants not having adequate cover (which often exclude liability for fitness for habitation, being beyond the usual duty of reasonable skill and care).

All trades involved in the construction or design of dwellings should review their contracts/project records for any potential risk (i.e., those from 1992 onwards) where liability might now exist and to re-consider your insurance policies for projects being undertaken now to ensure cover will extend for 15 years both for your works and back-to-back with those warranties you procure from your supply chain. Also ensure you keep project records for longer than you may do now.

Homeowners, freeholders of blocks and developers should also reconsider any claim that was originally out of time but now may not be. Previously settled claims or those subject to final determination by a court or arbitrator cannot be re-opened.

For more information on matters such as these, visit our property litigation page.

Get in touch with Michelle by calling 01202 725400.

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