Defects in Construction Projects

It is not uncommon for defects to arise in construction projects. If the parties have agreed to apply standard agreements such as AB 04 or ABT 06, the contractor generally has both the right and obligation to correct these defects at no cost to the client. If the contractor fails to fulfill this obligation, the client typically has the right to fix the defects at the contractor’s expense.

Liability period  

According to AB 04 and ABT 06, the contractor is responsible for defects resulting from their work for ten years from the project’s acceptance, unless otherwise agreed. For the contractor’s liability to be invoked, the defect must be substantial. This means it should significantly inconvenience the client. Examples include defects causing high costs to the client, defects that are extensive relative to the project, safety or health risks, or defects affecting the client’s ability to use the building for its intended purpose. The defect must also be due to the contractor’s negligence.

Warranty period

The liability period typically begins with a five-year warranty for the project and a two-year warranty for materials. If a defect is discovered within the warranty period, the contractor must correct it. If the contractor opposes this, they must prove that the defect is not due to any fault on their part. After the warranty period ends, liability remains for the remainder of the liability period.

Defect resolution

If the client discovers a defect after the warranty period has ended but within the liability period, they should contact an inspector. If the inspector determines that the contractor is responsible for the defect, it must be rectified. If the contractor fails to address the defect, the client can fix it themselves and claim compensation from the contractor. If the client has not yet paid the contractor, they may, under certain conditions, withhold part of the payment as security.  

We can assist you

At Advantage law Firm, we have extensive experience with construction contract disputes. We are happy to help you draft construction contracts to prevent and minimize risks and address issues once they arise. Contact us, and we will help you move forward.