Latent Defect meaning

This Checklist applies to a property disposal and considers what must be revealed to a purchaser and the manner of disclosure by deducing title, preparing the contract and answering preliminary enquiries. It addresses both the content of disclosure and the way it is provided. What must the seller disclose? Nature of seller’s title Unless agreed otherwise, a purchaser may proceed on the basis that the property is freehold and free from encumbrances. In practice, that presumption is seldom relied upon, as title will be deduced to the buyer and the contract will set out the property particulars together with any incumbrances (see Drafting the contract below). However, this starting point is rarely relied upon in practice. Rather, evidence of title is produced and the paperwork captures relevant particulars and burdens. Latent defects Treating the property as freehold and unburdened by incumbrances places the seller under a duty to disclose latent defects in the title to the buyer. A latent defect is one that would not...

This Practice Note examines misrepresentation, misstatement and non-disclosure in property transactions. It outlines: a seller’s potential liability for answers provided to pre-contract enquiries; the buyer’s possible remedies for non-disclosure, misrepresentation and misstatement; and contractual provisions that may protect the seller if a claim is made. What is misrepresentation? In this context, a misrepresentation is a false statement of fact by one party to another that is not a term of the contract but persuades the other to enter into it. For liability to arise, the statement must be material and actually relied upon by the other party. If a seller gives an untrue answer in replies to enquiries (or elsewhere), the buyer relies on it when deciding whether to enter into the contract and then suffers loss by entering the contract, the seller will be liable for misrepresentation. It is unnecessary to prove the misrepresentation was the only matter relied upon; liability may arise even where the misinformation formed just...

Limitation Act 1980 and Latent Damage Act 1986 The Limitation Act 1980 (LA 1980), as amended by the Latent Damage Act 1986 (LDA 1986), sets the time limits for starting different categories of legal action. If proceedings are issued after the relevant period has run, a defendant can contend that the claimant’s remedy is time-barred. For the construction sector, the most pertinent deadlines concern contractual and tortious (negligence) claims, though the LA 1980 also fixes periods for personal injury, defective products and defamation. There are, moreover, particular limitation rules for claims under specific statutes, including the Defective Premises Act 1972, the Building Act 1984 and the Building Safety Act 2022. Limitation is often critical for disputes about defective work, as the cause of action may arise long before any issue is visible. For example, faulty foundations installed by a contractor might later cause wall cracking and subsidence, yet the problem may not manifest for years. In such circumstances, the limitation period may have lapsed before the defect becomes apparent...

This Practice Note closely examines how defects are addressed under the FIDIC Red, Yellow and Silver Books (2017 editions). For guidance on earlier forms and how they approached such issues, see Practice Note: FIDIC Contracts (pre–2017 editions)—defects. For a wider overview and context on defects, refer to Practice Note: Defects claims in construction. What is a defect under FIDIC contracts? As with many standard forms, FIDIC gives no express definition of ‘defect’. In general terms, a ‘defect’ arises where any part of the works or materials fails to comply with the contractual requirements (see Practice Note: Defects claims in construction — What is a defect? for further analysis). Clause 4.1 states that the Contractor must design, construct and complete the Works, and make good any defects, in accordance with the Contract (‘execute the Works’ is defined at clause 1.2(j)). Under clause 11, the Contractor is to ensure the Works meet the contractual condition by the end of the applicable Defects Notification Period (DNP), or as soon as reasonably...

We have taken it that, because communal areas are mentioned, the property in question is a block of flats. For the first two years after completion of the initial sale of a new-build property, defects cover is supplied, under National House Building Council (NHBC) Buildmark, by the builder, who is responsible for putting right any faults that arise in the property and that then fall within the scope of the policy...