Unearthing the contractual landscape relating to latent defects in construction projects

The Association has received an influx of queries on latent defects, specifically concerning what latent defects entail and how one ensures that works being requested of a contractor during the latent defect liability period are latent defects within the legal and contractual framework.

In order to address the question from the perspective of advice sought from our members, the JBCC document will be used as a basis for providing guidance.

The contract process under the JBCC (using the JBCC 6.2 as the benchmark) is generally as follows:

• The Contractor is responsible for the works from Site Handover to Practical Completion. During this time period, all defects are addressed by the contractor, whether they are patent or latent.
• The Patent Defect liability period remains from Practical Completion to Final Completion in terms of the Contract. Patent Defects refer to those defects that arise through a reasonable inspection. In simpler terms, these are the defects that can be seen and are not hidden. Clause 21.12 states that final completion shall be conclusive as to the sufficiency of the works and that the contractor’s obligations have been fulfilled other than for latent defects. Therefore, at this stage, the patent defect liability period comes to an end.
• From Final Completion onwards, the Contractor remains liable for the latent defect liability period. A latent defect is defined in the JBCC 6.2 as “A defect that an inspection of the works, the principal agent and/or agents would not reasonably have revealed”.
• In terms of clause 22.1 the latent defects liability period commences at the start of the construction project and ends 5 years from the certificate of final completion.

Following the contract, patent defects are those that are reasonably discovered on proper inspection at practical completion and then again at final completion. Final completion should mean the end of the patent defect liability period in terms of the contract. At this stage, only the latent defect liability period runs for a period of 5 years.

Latent defects should not be in connection with items that are known to have a shorter lifespan or that have a guarantee period. For example, a geyser that stops working 6 months after final completion, in my assessment, should be referred to the manufacturer as per the terms of the guarantee. Kerbing that is damaged as a result of the negligence of a resident or the owner should be repair works and not regarded as a latent defect.

Increasingly, clarity is being sought as to whether maintenance-related items are regarded as latent defects and the answer is that they are not. Latent defects are those that exist at final completion but will only become visible or apparent at a later stage. For example, a structural defect might   exist at final completion, i.e. the end of the patent defects liability period, but it is not identifiable through reasonable inspection and only becomes apparent later.

It is said that the easier way to remember “latent” defects is to equate it in thought with “later”. When assessing a latent defect, you are well within your rights to ascertain whether maintenance was properly carried out and whether the lack of maintenance gave rise to the “defect”. If the item is a maintenance-related item and lack of maintenance gave rise to the “defect”, this should not be regarded as a latent defect. It is advisable to do a complete handover at the time of final completion with quality control packs and maintenance guidelines and ensure that the Employer / Project Owner receives these. When a defect arises, one could establish whether the required maintenance actually took place to ascertain whether a lack of maintenance has led to the “defect”.

Following the above guidelines, one could easily attribute “defect” items as required maintenance or a latent defect.

The Association is available to assist members with issues concerning latent defects on a one-on-one basis. Please call 031 831 3210 or email bilaal@masterbuilders.co.za for further information.

Bilaal Dawood

Head: Membership Services