SA Affordable Housing May / June 2017 // Issue: 64 | Page 17

CONTRIBUTORS DEFECTS LIABILITY PRIOR TO PRACTICAL COMPLETION Practical completion is defined in the JBCC as: ‘The stage of completion as certified by the principal agent where the works or a section thereof has been completed free of patent defects other than minor defects identified in the list for completion and can be used for the intended purpose.’ The most important ‘performance date’ is when the date of practical completion has been attained. Thereafter the employer may occupy the building in accordance with the predetermined timeline. In terms of the JBCC it is of great importance that the work meets the required standards at the date of practical completion. Therefore, the principal agent, together with other agents and the contractor are encouraged to work ‘as a team’ towards achieving this goal. Where the work fails meet the required standard as mentioned, the principal agent is obliged to issue a comprehensive list of defects that need to be repaired. A competent and eager contractor must be given the opportunity to repair its defective work. If the contractor fails to remedy the defective work within a period of five business days of being notified, the employer may invite a third-party contractor to repair same. The employer must always try to mitigate the contractor’s loss by affording it the opportunity to repair its defective work. Generally, the employer’s damages will be limited to the costs of repair to bring the project to practical completion. DEFECTS LIABILITY DURING THE DEFECTS LIABILITY PERIOD The defects liability period starts on the calendar day after the date of practical completion and ends at midnight 90 calendar days from the date when practical completion has been reached or when the work on the list for final completion has been completed to an acceptable standard, whichever is the later. After practical completion has been attained, the principal agent shall issue the list for completion to the contractor. The list for completion is defined as: ‘A list by the principal agent where practical completion has been certified, listing defects and/or outstanding work to be completed.’ The principal agent may only issue one list for completion, however if other defects become apparent during the defects liability period, the principal agent may instruct the contractor to repair same. Final completion is only achieved after a minimum of 90 calendar days following practical completion to afford the contractor the opportunity to remedy all items on the list including latent defects not apparent at the date of practical completion. The list for final completion is defined as: ‘An updated list for completion issued by the principal agent after the inspection of the works for final completion, where final completion has not been achieved, listing defects and/or outstanding work to be completed to achieve final completion.’ Final completion is defined as: ‘The stage of completion of the works as certified by the principal agent as being free of defects.’ After the final completion certificate has been issued it means that the contractor has fulfilled all its duties in terms of the contract, not including latent defects. The careless issuing of a final completion certificate by the principal agent may lead to a claim for professional negligence against the principal agent. An employer has no claim against the contractor for defective work after the final completion certificate has been issued, because once it has been issued it cannot be amended or withdrawn. The certificate can only be disputed on limited grounds, for example, fraud or where he acted beyond his powers. DEFECTS LIABILITY AFTER THE ISSUING OF THE FINAL COMPLETION CERTIFICATE Once final completion has been reached all of the contractor’s obligations have been fulfilled other than latent defects. A typical example of a latent defect is inadequate foundations causing subsidence of the building. The contractor’s liability for latent defects is limited to a period of five years from date that final completion has been attained. An employer is obliged to institute action against the contractor to rectify defects within three years from the date on which he becomes aware of the defects or could reasonably have become aware of the existence of the defect, failing which the claim prescribes. The contractor’s obligation for damages regarding defective work claims is not terminated by the issuing of a final completion certificate and the contractor is still obliged to repair all latent defects that become apparent during the latent defects liability period. A competent and eager contractor must be given the opportunity to repair its defective work. Construction Law Specialists Email: [email protected] www.endvdm.co.za Cape Town: Bella Rosa Village,5th Floor, Modena Building, 21D Durbanville Avenue, Rosendal, Bellville Tel: [phone] Johannesburg: 1st Floor Bradford Cnr, 2 Bradford Rd, Bedford Gardens Tel: [phone] AFFORDABLE SA HOUSING MAY - JUNE 2017 15