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Developers beware: time can stand still for defective homes

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legal matters

Back in 1972, Parliament probably thought that it was doing a good thing when it passed the Defective Premises Act. The Act imposed a duty upon anyone who takes on work in connection with the provision of a dwelling, to ensure that the work is done in a workmanlike or professional manner and that the dwelling is fit for habitation. Should an occupier of a dwelling discover that it is unfit for habitation, they have a statutory remedy, irrespective of contract, against the defaulter.

Parliament wasn't to know that six years later the provisions of this legislation would be completely overtaken by the decision of the House of Lords in Anns v Merton (1978), with the result that builders, designers and even local authorities were to owe a similar duty at common law for all types of building, not just dwellings.

There followed a rapid rise in the number of actions brought against anyone involved in the construction of defective buildings.During the 1980s, I witnessed a succession of cases where the number of defendants was so great that it was not possible to fit the title of the action on one page. Main contractors, subcontractors, suppliers, engineers, architects, local authorities: it mattered not that they had no contract with the occupier, the claim against them was for negligence.

Gradually the appellate courts began to question the wisdom of allowing claimants to recover the cost of repairing building defects on the same basis as if there had been a contract, and the star of tortious actions for defective buildings began to fade. Finally the House of Lords snuffed it out completely in Murphy v Brentwood (1991) and held that those involved in a building's procurement owed no common law duty to ensure it was defect-free. Building owners were thrown back on their contractual remedies. Building occupiers were forced to invent a contract in the form of a collateral warranty. Only then did the occupiers of defective dwellings, who didn't have a contract or a warranty, find a use for the Defective Premises Act, some 20 years after its enactment.

The Act has a few wrinkles and one was considered recently by the Court of Appeal in Alderson v Beetham Organisation (2.4.03). Under the Act a claimant must bring a claim within six years from the date when the dwelling was completed. Time can be extended, however, if further work is done to 'rectify work already done' and the six years starts again when the further work is finished.

Mrs Alderson and her daughter bought two basement flats in a conversion completed by the defendant developer in May 1994. The following year the claimant reported black mould and fungus in the bedrooms and the developer carried out some works to the external flagstones and drainage in May 1995. In September, one of the flats suffered such serious flooding that the fire brigade was required to remove the water and sodden carpets. The claimant instructed a surveyor, who found that both flats had inadequate damp proofing and should have been tanked.

The claimant did not issue proceedings until January 2001, claiming a breach of the Defective Premises Act. The defendant argued that time ran from the completion date in May 1994 and that the action was time-barred.

The work it did to the flagstones and drainage, the developer said, had nothing to do with the real problem, the defective damp proofing.The limitation period should not be extended in all cases where further work is carried out.

The Court of Appeal asked what the reason was for the further work. It was to rectify the damp problem which was why the flats were unfit for habitation. The word 'rectify' suggested that there was a problem. The problem was either a failure to carry out the work in a workmanlike manner or to use proper materials. The Act applied therefore to all further work carried out to rectify such a failure. Back in 1972, Parliament intended that there should be a fresh cause of action when further work did not rectify the original breach of duty and the claimant should be allowed to pursue their claim.

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