What is a defects liability period?
It is the period after practical completion in which defects must be put right, and its end often releases the rest of your retention.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
For how the JCT Standard Building Contract runs the period clause by clause, see how JCT clause 2.38 works.
The answer
Contracts give it different names. JCT calls it the Rectification Period, and NEC works to a defects date. Your subcontract states how long it runs, often 12 months. During the period, you must come back and fix defects in your own work that show up, at your own cost. At the end, a list of defects is drawn up. Once they are made good, a certificate is usually issued, which under JCT is the Certificate of Making Good. That certificate often triggers the second release of your retention. Two things catch subcontractors out. First, your subcontract may tie your period to the main contract's, so it can end long after your own work finished. Second, your release may wait on a certificate that covers every trade, not just yours. The end of the period is not the end of your liability for defects. You can still be liable for defects found later; the period only sets the routine for fixing them. So check what your subcontract ties your period and your release to, and diarise the end date the day you sign.
Example
Illustrative example. The scenario and figures are invented.
The facts
A flooring subcontractor finishes its work in January. Its subcontract ties its defects period to the main contract's 12-month Rectification Period, which starts at practical completion in June.
What happens
- So the subcontractor's period ends the following June, 17 months after its own work finished.
- £8,000 of retention, the second release, waits on the Certificate of Making Good under the main contract.
- Two months before the end, the subcontractor asks when the certificate is expected and which listed defects, if any, are its own.
- One is: a lifted tile, fixed within the week and confirmed in writing with photographs.
The outcome
The certificate is issued a month after the period ends, and the £8,000 is asked for in the next application with the certificate attached.
Our Retention Loss Prevention puts the end of each defects period, and the certificate each release waits for, in a diary before the release falls due.