The Defective Premises Act 1972 is a relatively short piece of legislation. However, its importance should not be overlooked when considering residential building works, ‘new build’ properties or refurbishment and extension of existing homes. The Building Safety Act 2022 has made some significant changes to this legislation which has provided additional protection to homeowners outside of the usual contractual periods of liability.
An important point to note is that the duties and obligations imposed by the Defective Premises Act 1972 cannot be excluded or restricted and sit alongside any contractual obligations the parties have agreed between themselves.
This article explores the Defective Premises Act 1972, highlights the changes made by the Building Safety Act 2022 and what consultants and developers will need to consider.
What does section 1 of the Defective Premises Act 1972 say?
The Act says:
“A person taking on work for or in connection with the provision of a dwelling (whether the dwelling is provided by the erection or by the conversion or enlargement of a building) owes a
Duty-
- if the dwelling is provided to the order of any person, to that person; and
- without prejudice to paragraph (a) above, to every person who acquires an interest (whether legal or equitable) in the dwelling;
to see that the work which he takes on is done in a workmanlike or, as the case may be, professional manner, with proper materials and so that as regards that work the dwelling will be fit for habitation when completed.”
What does section 1 of the Defective Premises Act 1972 mean?
There are a number of points to draw from this provision:
- What types of property are impacted?
The Defective Premises Act 1972 only applies to ‘dwellings’. This term is not defined in the Defective Premises Act 1972, but includes both houses and flats and anywhere where a person lives and ‘makes one’s home’. It does not apply to commercial property.
- What types of work are impacted?
Prior to the introduction of the Building Safety Act 2022, the Defective Premises Act 1972 did not apply to any enlargement or repairs to an existing dwelling, only to the provision of new dwellings, which included conversions. The Building Safety Act widened the scope for the types of work which is caught by the Defective Premises Act 1972, as set out below.
- Who owes the duty?
‘A person taking on work’ can include contractors, sub-contractors and the design team, such as architects and structural engineers. The duty does not extend to a local authority exercising its building control function or building inspectors.
- To whom is the duty owed?
The duty is owed to:
1. The person who commissioned the dwelling. The recent URS Corp Ltd v BDW Trading Ltd case, confirmed that the duty is owed to developers. Please note that an appeal in this case will be heard by the Supreme Court in December 2024.
2. Every person who acquires a legal or equitable interest in the dwelling. The duty therefore extends not only to the first purchaser of a property but to subsequent purchasers of a property, as well as leaseholders.
- What is the duty?
The courts have distilled the duty created by section 1 of the Defective Premises Act 1972 into three elements:
1. The duty-holder must carry out its work in a workmanlike or professional manner.
2. The duty-holder must use proper materials.
3. The dwelling must be fit for habitation when completed.
For a successful claim to brought, a claimant must show that inadequate work or inadequate materials or both, have led to a defect that means the dwelling is unfit for habitation.
- Unfit for habitation
What does unfit for habitation mean? Some examples of what the courts have held to be unfit for habitation include:
-
- A property with no damp-proof course.
- A house without a roof.
- The construction of a dwelling on an unstable hillside.
- Inadequate foundations.
Defects concerning lighting, power, drainage, sanitation and water supply are further examples of the types of defect which could meet the threshold, but it will depend on the facts of each case.
A defect can render a dwelling unfit for habitation even if it can be remedied at a relatively modest cost. The general test is that a dwelling will be fit for habitation if it can be occupied for a reasonable time without risk to the occupants’ health and safety, or without undue inconvenience or discomfort.
For how long can a claim be brought under the Defective Premises Act 1972?
Prior to the introduction of the Building Safety Act 2022, a claim under the Defective Premises Act 1972 could be brought for up to six years from when the work was completed. However, if the defect was repaired the six year period would start again. The Building Safety Act significantly increased this limitation period, as explained below.
Changes introduced by the Building Safety Act 2022
The Building Safety Act significantly expanded the scope of the Defective Premises Act 1972 to cover refurbishment work to existing dwellings, providing it is done in the course of a business, whereas previously it only applied to ‘new builds’.
It also changed the limitation period, the time period in which a potential claimant must bring their claim, to the following:
- 15 years prospectively for work in connection with a new dwelling, and refurbishment work on an existing dwelling, for claims that accrued on or after 28 June 2022.
- 30 years retrospectively for work in connection with a new dwelling where the right to bring a claim accrued before 28 June 2022. The 30 year period only applies to claims in respect of new dwellings, not refurbishment work.
The retrospective extension of the limitation period to 30 years has meant that claims relating to work in respect of new dwellings undertaken as far back as the early 1990s, which previously would have been time barred, can now be pursued. This presents significant issues for those defending potential claims as:
- Records may not have been kept.
- Those involved in the original construction may no longer be contactable or may have difficulty recollecting the facts.
- Companies involved in the supply chain may no longer be trading, meaning that the claim cannot be passed onto culpable third parties.
Considerations for developers
Developers might wish to consider their portfolios and consider whether there are any historical claims which could now be pursued, which would previously have been ‘time barred’. However, the new provisions do not apply to any claim which has been settled or was subject to final determination by a court or arbitrator.
In light of the significant increase in potential liability, developers should:
- Consider whether they have sufficient warranty and insurance protection to cover the extended limitation period for existing projects.
- Ensure that sufficient guarantee, warranty and insurance protections are in place when negotiating new contracts.
- Consider document retention policies – documents should be retained for the extended duration of the relevant liability period, noting that the liability period may be reset on completion of any remedial or refurbishment works.
Further information
Please visit our Building Safety Hub for more information on the Building Safety Act 2022.
Our construction and infrastructure team can advise developers, subcontractors, architects, structural engineers and other professional construction consultants, as well as building owners, homeowners and leaseholders, in relation to bringing and defending claims under the Defective Premises Act 1972.
For more information, please contact Sian Barrett or Mark Manning.
