Real Estate Blog: Proposed longer limitation periods and wider liability for defective work under the Building Safety Bill

The Building Safety Bill is going through parliament and is expected to be finalised in 2022. As it stands, the bill is set to make changes to the Defective Premises Act 1972 (DPA), which will impact the construction industry.

The most significant proposed change is to extend the period for claims for defective work to dwellings to 15 years. The period within which a claim can be brought is often crucial in determining whether it can be successfully pursued, and so this potential change would have a large impact on the construction and maintenance of residential buildings and the management of risks.

The Current Position

The Limitation Act 1980 outlines the periods within which claims can be brought. In construction contracts, this period is usually six years from the date the right to claim accrues under contract, which can be extended to 12 years when the contact has been executed as a deed.The current position under the DPA is that claims can be brought for defective works connected with the ‘provision of a dwelling’ (i.e. the original construction or conversion works), which render a dwelling unfit for habitation, within six years from completion of the dwelling.

The Potential Future Position 

The Building Safety Bill proposes an additional clause to the DPA which extends the scope for claims for defective works to include ‘work in relation to any part of a relevant building’ (i.e.  a building that contains at least one dwelling that remains after completion). In addition to the new buildings already covered, this clause will also extend to refurbishment and remediation works.Whilst the principle of extending the limitation period has been criticised, it is important to note that if it becomes law, the 15-year period will apply retrospectively to claims in relation to new dwellings, and claims for defective works on projects that were previously out of time could potentially be brought by claimants following implementation of the Building Safety Bill.

Practical pointers 

Given the likely change to the law, those involved in works to buildings that will have reached practical completion less than 15 years prior to the Building Safety Bill coming into force should:

• take steps to understand their liabilities and potential risk areas that may arise from the changes in law (particularly where claims were previously dismissed due to being time-barred); and
• retain documents for an extended period where applicable (many companies currently destroy records after 6 or 12 years).

For further information or specific advice on the Building Safety Bill, please contact Hannah Ley or another one of our Construction experts.