One of the significant elements of the Building Safety Act 2022 (BSA) has been its amendments to the Defective Premises Act 1972 (DPA). Previously the limitation period to bring a claim under the DPA was 6 years from the date of completion of the works. This limitation period has now been extended to 30 years retrospectively for claims accruing before 28 June 2022 and to 15 years for claims accruing after 28 June 2022. Given these extended limitation periods, we are likely to see an increase in claims referencing the DPA in relation to dwellings where other methods of recourse are no longer available. What constitutes a dwelling can often be a point of contention when considering whether buildings such as student accommodation or mixed-use buildings fall within the definition. For the purpose of the DPA, the defining characteristic of a dwelling would appear to be that of exclusive possession for the purpose of living.
The amendments to the Defective Premises Act will undoubtedly be of interest to those involved or who have been involved in the construction of dwellings. House builders and other interested parties should consider how they might limit their exposure to claims for past projects where the contract liability period may have expired but where the DPA limitation period is still intact, and how they might seek to limit their exposure to claims in future projects.
Defective Premises Act: Who owes a duty and to who is it owed to?
The Defective Premises Act applies to those taking on work for, or in connection with, the provision of a dwelling which provides that, depending on the specific facts of each project, liability under the DPA could extend to architects, designers, consultants and developers as well as contractors. Those taking on work for or in connection with the provision of a dwelling must ensure that they carry this out in a workmanlike and professional manner, with proper materials to ensure that the dwelling will be fit for habitation when completed. The amended DPA is now extended to include work in relation to any part of a relevant building which brings existing buildings (e.g., refurbishment works and remedial works) under the DPA although this amendment only applies prospectively.
Those who owe a duty, owe it to a broad group of individuals and/or entities. The DPA provides anyone with a legal or equitable interest in a dwelling the right to bring a claim.
Defective Premises Act: Fitness for habitation
The term “fitness for habitation” has been interpreted by the courts generally.
In Rendlesham Estates Plc v Barr Ltd [2014] EWHC 3968 (TCC) Edwards-Stuart J in his judgement concluded that “for a dwelling to be fit for habitation within the meaning of the Act, it must, on completion (without any remedial works being carried out):
(a) be capable of occupation for a reasonable time without risk to the health or safety of the occupants…; and
(b) be capable of occupation for a reasonable time without undue inconvenience or discomfort to the occupants.”
Furthermore, in Harrison v Shepherd Homes Ltd [2011] EWHC 1811 (TCC) it was decided that “any significant defects in foundations are properly matters which could be said to give rise to a lack of fitness for habitation.” Importantly, when considering how to interpret “fit for habitation”, Ramsey J referred to Bole and Another v Huntsbuild Limited [2009] EWCA Civ 1146 wherein Dyson LJ said:
“In my view, it is clear that the judge meant that defects which render a dwelling unfit for its purpose, are defects which render it unfit for habitation. The obvious purpose of a dwelling is for it to be occupied and inhabited safely and without inconvenience.”
Importantly, it would therefore seem as though a dwelling must be capable of being occupied “safely and without inconvenience” for it to be deemed fit for habitation. Although liability under the Defective Premises Act is relatively untested in relation to defects which cause fire safety issues, it could be argued that defects which cause a dwelling to be deemed a high fire risk will likely satisfy the threshold of whether a dwelling being seen to be incapable of being occupied safely and without inconvenience.
Defective Premises Act: Common parts
Duty holders must also be wary of their potential liability in relation to communal facilities/parts in blocks of flats, apartments, student residences etc. which do not form part of any particular dwelling. Although communal facilities do not in their own right fall within the definition of a dwelling for the purpose of the DPA the structural and common parts may be seen to be constructed in connection with the relevant dwelling. Nonetheless, defects in common parts will only be relevant to the extent that they impact the fitness for habitation of a dwelling.
Defective Premises Act: Past projects
For works completed between 12 and 30 years before 28 June 2022, the availability of evidence to prove the condition of a dwelling at the completion is likely to be a significant hurdle with many businesses having destroyed records. Entities taking on work for or in connection with the provision of a dwelling should retain and/or retrieve documents in relation to past projects until the limitation period under the DPA has expired.
The BSA provides two possible defences to claims brought about by virtue of the extended limitation periods under the Defective Premises Act:
“Where an action is brought that, but for subsection (3), would have been barred by the Limitation Act 1980, a court hearing the action must dismiss it in relation to any defendant if satisfied that it is necessary to do so to avoid a breach of that defendant’s Convention rights.
Nothing in this section applies in relation to a claim which, before this section came into force, was settled by agreement between the parties or finally determined by a court or arbitration (whether on the basis of limitation or otherwise).”
As such, this will allow courts to dismiss claims where the defendants can show that the retrospective extension of the limitation period infringes on their right to a fair trial. The application of this defence is yet to be tested and it is unclear how the defence will play out in court. It has been suggested that a possible argument of a breach of Convention rights due to the lack of available documentation may be available to the defendants although only time will tell how this argument will stand up in court.
Defective Premises Act: Future projects
In the negotiation of contracts for future projects, duty holders should ensure that there are adequate warranty, guarantee and insurance provisions in place to sufficiently apportion the risks associated with the revised DPA.
Duty holders should ensure that they have a sufficient warranty and insurance protection and which extends to the duration of the limitation periods under the DPA.
Duty holders must bear in mind that the Defective Premises Act cannot be contracted out of.
If you have any queries or would like to discuss any of the points raised in this blog, please contact Brandon Pizaro in our Real Estate team.
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Disclaimer: Anything posted in this blog is for general information only and is not intended to provide legal advice on any general or specific matter.