Developers have to deal with all kinds of obstacles, hiccups and liabilities during the construction of a project. This can include damage to the property, injuries to workers, potential funding issues and even law violations.

Upon completion of a property, whether commercial or residential, patent defects can often be found. However, there may still be latent defects hiding under the surface that are not immediately noticeable during inspection.

These issues can arise months or even years later, which is why many developers and housing associations obtain latent defects insurance at the start of the project. This helps to cover any issues and repairs whenever latent defects arise.

But, who is responsible? Is it the property developer? Continue reading to find out.

What are latent defects?

Latent defects are significant faults in workmanship, design or materials used in the construction of a building that may not become apparent or detectable until several years after completion.

Latent defects can be found in several different forms, with the most common issue caused by poor foundations and footings. Using poor-quality materials can lead to damage to a building.

You may find latent defects arise because a builder didn’t install wall ties and other essential structural additions into cavities. Without these essential steps during construction, latent defects are sure to arise in the months and years after completion.

Such issues arise – or are found – many years after the defects liability period has ended. This is where the term ‘latent defects’ comes from. A developer can obtain latent defects insurance at the start, or throughout, construction to cover themselves financially should issues occur after the completion of the project.

What’s the difference between latent and patent defects?

Patent defects are issues found within a building during an inspection after completion of the project. These are problems with the building that are easily identifiable, such as poorly laid foundations, cracks in the floors or walls, broken or missing roof elements and leaks or water stains.

The main difference between patent and latent defects is that the former are issues that can be seen during the inspection of a property, while the latter only appears later on, long after construction has been completed.

Who is liable for latent defects?

Latent defects offer a lot of problems for a client and a developer because they can be extremely expensive to repair. Meanwhile, accountability for the issues is often difficult to decide.

Contracts in the construction industry typically don’t include any information on latent defects and, depending on the contract itself, liability may fall at the feet of designers and developers for anything that arises in years six to 12 following completion.

If the homeowner believes the developer was negligent, they can still pursue damages and seek liability, but in most home purchases, the presumption is often placed against the seller. Often, they must prove that they did not hide or misrepresent defects in the building during the sales process.

During the first two years of construction, the developers are usually liable for any defects, and this is known as the defects liability period. 

If there are any issues with the building, they must be reported to the contract administrator who will determine if the defects arose from poor workmanship or a lack of maintenance. If it’s determined that the defects weren’t a result of poor maintenance, the contractor must fix the defects in a set time period.

Obtain latent defects insurance

To avoid any negligence complications or liability difficulties, developers or contractors should obtain a latent defects insurance policy for the property before building work commences. This cover helps the homeowner – years later – fix the issues found without it hurting their pocket or having to chase up developers and contractors, who may not even be in business anymore.