Latent Defects in Construction

 If a construction project has a flaw, it's essential to understand who is ultimately responsible for the defect. In most cases, this responsibility falls on the architect, engineer, contractor, or supplier, but it can also fall on the owner. However, the parties involved rarely admit fault regarding their work. For example, the contractor may blame the architect or engineer, or the engineer may blame the contractor.

A latent construction defect is an already present error that has not yet been discovered. These defects often go undetected until years later. For example, a structural beam may be strengthened. Another example is a leaking roof. Leaking roofs can damage building components and cause mold growth.

Latent defects are often overlooked, but they can affect the value of a building. A homeowner can still pursue action against a contractor even if a defect is not immediately apparent. Latent defects are often a result of faulty design, poor artistry, or materials.

A contractor's responsibility for latent defects in construction extends beyond the warranty period. A homeowner must first identify and declare a latent defect to the contractor, who has two years to fix it.

In construction, latent defects are hidden flaws in a project that are not apparent until many years after the project has been completed. They are very different from patent defects, easily detectable through regular construction inspections and basic quality testing. Latent defects can cause significant problems for the owner, operator, and contractor and can result in disputes if they are not detected early enough.

The main difference between a defect and a latent one is the degree of concealment. Unlike latent defects, obvious defects are easily identifiable and are often relatively inexpensive to fix. They should be corrected before the job is finished.

Design flaws in construction can lead to catastrophic consequences for a construction project. These flaws occur after the initial design and testing phases and sometimes even after delivery. While there are ways to avoid faulty designs, some imperfections are unavoidable. Some of these flaws can be corrected during testing and burn-in.

Many construction defects are caused by poor quality artistry. This could be due to site conditions or a lack of skill in a particular area. In such cases, the contractor may be liable for the costs involved. Artistry flaws in construction are more likely to occur after a building has been completed than design flaws, and most can be fixed by redoing the work. However, some spots are more severe and can negatively impact the entire building.

The statute of limitations for construction defect claims can limit the time you can pursue legal action. For example, some states, such as New Jersey, limit the time a construction defect claim can be brought to ten years after the defect was discovered. This outer limit is called the statute of repose, and it can be helpful when deciding when to bring a claim.

A typical example of a latent defect is a wall damaged by water but not discovered until after the construction project was completed. This kind of construction defect must be located within three years of the date the water damage was found, which is generally eight years after the project was completed.

A policy that covers latent construction defects is not an option for every property owner. It doesn't cover consequential losses or economic losses. It also excludes coverage for non-structural parts of a building, such as wiring, plumbing, gas, water, ventilation, heating fixtures, or other systems. Nevertheless, it's important to note that the cost of repair or replacement of such components may exceed the price of a latent defect policy.

Fortunately, there are several ways to protect your business against this risk. For example, latent defects insurance can be purchased for commercial new builds, major extensions, and mixed-use developments. In addition, it can protect your business from the financial loss resulting from a construction defect. Furthermore, it can provide a warranty acceptable to UK finance mortgage lenders.