When Do Defects Create A Claim Under the Defective Premises Act?
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What Does the Defective Premises Act Require from Housebuilders? Rendlesham Estates v Barr 1 reviewed the obligations of a contractor involved in constructing flats to be used as homes (dwellings) and the requirements of the Defective Premises Act 1972 This case considered the rights of 120 apartment owners. A development in Leeds was completed in the early noughties, and each flat was sold off-plan as a ‘high quality apartment for young professionals.’ However, the developer had insufficient budget. As a result, corners were cut and problems soon became apparent. In the meantime, the developer had become insolvent, so the residents (who had no contract with the builders) brought proceedings for breach of statutory duties under the Defective Premises Act 1972. What the Act Requires Section 1 DPA 1972 provides that: “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- (a) if the dwelling is provided to the order of any person, to that person; and (b) 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.” The judge then applied this duty to the facts to determine the extent of the builder’s obligations: 2 What is a Dwelling? “Each individual apartment, together with its balcony, constitutes a separate dwelling within the meaning of the Act. The common parts and the basement car park do not form part of any particular dwelling. However, the construction of the common parts and the basement car park constituted work carried out for or in connection with the provision of a dwelling (namely, each apartment) so that the duty imposed by section 1 of the Act applies in respect of it.” Fit for Habitation? At Completion “When considering whether or not an apartment is fit for habitation, its condition has to be considered at the date when the work was completed...” As a Whole “The defects in any particular apartment must be considered as a whole when determining whether or not that apartment was fit for habitation on completion.” Homeowners: “The apartments must be fit for habitation by all the types of person who might reasonably be expected to occupy them, including babies and those who suffer from common conditions such as asthma or hay fever.” Against Standards When Built “Whether or not an apartment is fit for habitation is to be judged by reference to the standards current at the time when it was built.” Cost and Awareness are Irrelevant: “The fact that a particular defect which renders an apartment unfit for habitation could be remedied at relatively modest cost, does not of itself mean that there is no breach of duty under section 1…. A defect may render an apartment unfit
Transcript of When Do Defects Create A Claim Under the Defective Premises Act?
What Does the Defective Premises Act Require from Housebuilders? Rendlesham Estates v Barr1 reviewed the obligations of a contractor involved in constructing flats
to be used as homes (dwellings) and the requirements of the Defective Premises Act 1972 This case considered the rights of 120 apartment owners. A development in Leeds was completed in the early noughties, and each flat was sold off-plan as a ‘high quality apartment for young professionals.’ However, the developer had insufficient budget. As a result, corners were cut and problems soon became apparent. In the meantime, the developer had become insolvent, so the residents (who had no contract with the builders) brought proceedings for breach of statutory duties under the Defective Premises Act 1972. What the Act Requires Section 1 DPA 1972 provides that:
“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- (a) if the dwelling is provided to the order of any person, to that person; and (b) 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.”
The judge then applied this duty to the facts to determine the extent of the builder’s obligations:2 What is a Dwelling?
“Each individual apartment, together with its balcony, constitutes a separate dwelling within the meaning of the Act.
The common parts and the basement car park do not form part of any particular dwelling. However, the construction of the common parts and the basement car park constituted work carried out for or in connection with the provision of a dwelling (namely, each apartment) so that the duty imposed by section 1 of the Act applies in respect of it.”
Fit for Habitation?
At Completion “When considering whether or not an apartment is fit for habitation, its condition has to be considered at the date when the work was completed...”
As a Whole “The defects in any particular apartment must be considered as a whole when determining whether or not that apartment was fit for habitation on completion.”
Homeowners: “The apartments must be fit for habitation by all the types of person who might reasonably be expected to occupy them, including babies and those who suffer from common conditions such as asthma or hay fever.”
Against Standards When Built “Whether or not an apartment is fit for habitation is to be judged by reference to the standards current at the time when it was built.”
Cost and Awareness are Irrelevant: “The fact that a particular defect which renders an apartment unfit for habitation could be remedied at relatively modest cost, does not of itself mean that there is no breach of duty under section 1…. A defect may render an apartment unfit
for habitation even though both the owner and the builder were unaware of its existence at the time: for example, defective foundations.
Defects Rendering A Dwelling Unfit
The dwelling is probably unfit if:
“[A] local authority with knowledge of its condition would not approve it as fit for occupation under the Building Regulations”
There is “[s]erious inconvenience that is not transient … For example, a lift in a tower block that was poorly installed so that it frequently broke down could well make apartments on the higher floors unfit for habitation.”
There is “[a] risk of failure within the design life of the building of a structural element of the dwelling…which exists at the date of completion (whether known about or not).”
Measure of Damages for Flats Unfit for Habitation
The builder argued that the correct measure of damages i.e. the amount it would have to pay each resident was limited to that resident’s share of the service charge payable to the management company to correct those defects. The court said:
“I can see no reason why Parliament should have legislated for the unjust result for which Barr contends and I can find nothing in the wording of section 1 of the Act that compels such a conclusion. In my judgment the owner of an apartment which has been rendered unfit for habitation because of a defect in the common parts is entitled to the cost of repairing that defect, or at least to the cost of carrying out those repairs necessary to make his flat fit for habitation.”3
Conclusion The builder was liable for the cost of rectifying many of the defects in the properties, for loss in value of the properties, as well as damages for distress and inconvenience ranging from £750 to £2,250 for each year.
The Author Sarah Fox of 500 Words Ltd prepared this note. She helps construction companies write simpler contracts and understand complex ones, including those for building homes. She is also author of the 500 Word Contract™. To find out how Sarah can help you understand and comply with your statutory obligations, contact her on: 07767 342747 or by email: [email protected].
Footnotes
1 Rendlesham Estates Plc & Ors v Barr Ltd [2014] EWHC 3968 (TCC). 2 Paragraph 82.
3 Paragraph 233.
