Dear Claire – Summer 2019
25 / 06 / 2019
Perplexed by property law? Relax, Professional Support Lawyer Claire Haynes is here to answer your most pressing questions…
Q: My company has taken a 10 year lease of newly constructed premises. We have been in the building for just over a year, but recently an issue with the flooring of the property has come to light.
The contractor is no longer working at the premises and the landlord is saying that the defect is not their responsibility as the issue has only come to light since the building works were signed off.
Who is responsible for remedying the defect as it is affecting our use of the premises?
A: Responsibility for remedying the defect will turn on the terms of the agreements governing the building works and your company’s occupation of the premises.
There is usually a period in which the contractor will be contractually obliged to remedy defects and snagging items after the certificate which confirms practical completion of the building works has been issued. During this period it would also be usual for the landlord to be under a contractual obligation to you to procure that the contractor remedies any identified defects. I recommend checking your agreement for lease and the building contract, if you have it, to determine whether the period for remedying defects has expired. If this window is still open, you should raise the defect to the flooring with your landlord and request that it is added to the list of defects which the contractor is required to remedy. You should act quickly as there is unlikely to be long left before the time period expires.
The period in which the contractor is required to remedy defects is often 12 months. If this period has expired, it would be prudent to obtain a copy of the certificate confirming that all defects identified and listed at the time of completion of the building were completed to the satisfaction of the landlord. This will enable you to check that the defect to the flooring was not on the list of defects which the contractor was required to correct.
You should also check the terms of your lease to determine who is responsible for defects in the premises during your period of occupation. For a new building it is common for a solicitor to negotiate that defects to the building are excluded from any service charge for the premises. If the tenant is in a strong negotiating position, responsibility for defects in the building might have been carved out from the tenant’s repairing covenant in the lease for a prescribed period of time but this would depend upon the negotiations which took place at the time between the parties. In your circumstances it looks like there could be a latent defect with the premises. Latent defects are also sometimes referred to as inherent defects and they are due to a defect in design, materials, workmanship, or supervision of contractors which existed, but was not discoverable on inspection when completion of the building works was signed off.
If the terms of the lease do not come to your aid, you will need to look to any contractual protection that you, or the landlord may have, which requires the contractor or the party responsible for the defect in the flooring to perform their obligations under the building contract or the terms of their appointment. This protection usually takes the form of a collateral warranty or third party rights. It is normal for a tenant of a newly constructed building to have been offered the benefit of any such contractual protection from the contractor and the main professional team. This is so that the tenant is not dependent upon the landlord enforcing the terms of its contract. If you have spent any money rectifying the problem you may also have a direct claim for these sums.
Sometimes product guarantees are available, more often for lifts and windows, but possibly for proprietary flooring so this avenue is worth checking as well.
You should also check for the existence of any agreements between the landlord and the contractor or the professional team as to settlement of any disputes or claims relating to the building works as they may be relevant.
As you can see, this is a complex area and so I recommend taking legal advice on the options which are available in your specific circumstances.