Toothless building legislation gets bite

A recent judgment issued in the Technology and Construction Court looks set to provoke a rash of claims against contractors and consultants.

It is based on a piece of legislation many had considered to be largely toothless and follows the judgment on Bole -v- Huntsbuild Limited and Richard Money Associates, which hinges on the Defective Premises Act 1972.

In September 2001, Mr and Mrs Bole bought a new build home from Huntsbuild. The foundations were designed for Huntsbuild by structural engineer Richard Money Associates. But unfortunately they proved to be inadequate. Richard Money Associate's design had failed to take full account of the fact that trees had been removed from the site and were not deep enough to prevent damage to the property due to heave of the sub-soil.

Mr and Mrs Bole and their insurers, brought proceedings against both Huntsbuild and Richard Money Associates to recover the costs of remedial works. As Richard Money Associates had been retained by Huntsbuild and therefore had no direct contract with Mr and Mrs Bole, proceedings were brought against them for breach of the Defective Premises Act 1972.

The Act states that: "A person taking on work for, or in connection with, the provision of a dwelling owes a duty ... to see that the work which he takes on is done in a workmanlike manner 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".

It applies to contractors, sub-contractors and design consultants - regardless of whether they have a direct contract with the dwelling owner or not. A dwelling can be defined as a house or flat, new build, conversion or extension. The duty in the case of contractors is to see that the work is done in a workmanlike manner. In the case of a professional, it is to ensure that it is done in a professional manner.

In either case the owner must prove that if the standards were not met, then the end result is that the dwelling is 'not fit for habitation' when completed. It is this test, which has prevented greater reliance on the Act up until now, because most defective properties are rarely unsuitable for habitation.

The judgment in the Bole case suggests that this may not be the case any longer. The judge said the question of whether a house was unfit for habitation was a matter of fact in each case, but in arriving at a decision, account had to be taken of the impact of the defects as whole - whether they were defects of quality or dangerous defects. Only minor defects should be excluded from consideration.

In the case in question, he concluded that the house was unfit for habitation, and awarded damages of £218,000 against both Huntsbuild and Richard Money Associates. On the face of it this may appear to be a surprising conclusion. Mr and Mrs Bole had continued to live in the house throughout and even had a child. It might be thought that this indicated that the house was fit for habitation.

But the judge thought otherwise. He was persuaded by the fact that the cracking caused by the heave was severe, had already been subject to three temporary but unsuccessful repairs and was predicted to continue for a further 15 to 20 years. As a result the house was deemed unfit for habitation because of the defective foundations. The judge also took into account that the side effects of the heave had been to increase noise conduction and the risk of smoke infiltration through cracks in the walls, as well as draughts and water penetration.

The consequences of this decision could be far reaching. It is not hard to imagine other structures in which defects do not affect the structural integrity of a property, or otherwise render it unsuitable for occupation, but which are sufficiently numerous as to put the contractor or consultant in breach of the Defective Premises Act. As a contractual relationship with the building owner is not necessary to rely on the Act, it opens up the possibility for owners to bring claims against third parties which otherwise may have not been available to them. It should also be borne in mind that the limitation period within which claims have to be brought is potentially longer under the Act than for a simple breach of a contract claim. Time only begins to run from when the dwelling is completed, not any earlier breach of contract such as when the defective design was completed or the inadequate foundations constructed.

For more informationon this or any construction issue, please contact Mark Jones on mark.jones@harveyingram.com or call 0116 257 6133.