No contract, no problem!

The judgment in the recent case of Rendlesham Estates Plc v Barr Limited illustrates how the Defective Premises Act 1972 can make a building contractor liable to a subsequent occupier of a dwelling, even where there is no contractual relationship between the contractor and the occupier.

The facts of this case were that a property development company had engaged a building contractor to construct two apartment blocks in Leeds.  The developer then sold individual apartments to various purchasers.  Shortly after the sale of the apartments, various defects became apparent.
 

The problem for the apartment owners was that they did not have the benefit of new home warranties (such as a NHBC guarantee).  Furthermore, by the time the defects had become apparent, the development company had become insolvent.  To make matters worse, there was no contractual relationship between the apartment owners and the building contractor. 

One of the defects related to an ingress of damp resulting in mould forming within the apartment.
 

Despite there being no contractual relationship between the apartment owners and the building contractor, the owners brought a claim against the contractor and based their claim on the provisions of the Defective Premises Act 1972.  That Act provides, in summary, that a party that erects a dwelling owes a duty to the subsequent owner of that dwelling to ensure that the dwelling is fit for habitation when completed.

In the Rendlesham Estates case, attention focussed on how to interpret the words “fit for habitation”. 
 

The court concluded that a dwelling is fit for habitation where the dwelling can be occupied without risk to the health or safety of the occupants and, importantly in this case, where there is no undue inconvenience or discomfort suffered by the occupants.

In many cases it will not be immediately apparent that defects pose any risk to the health or safety of an occupier.  The more obvious consequences of defects will be those causing ‘undue inconvenience and discomfort’. An ingress of damp and the resulting prevalence of mould within a property is a commonly experienced problem and one that often meets the ‘undue inconvenience and discomfort’ criteria. 
 

The Act is useful for residential occupiers who may be faced with construction defects but where the seller of the property is no longer solvent or where there is no warranty or no contractual relationship between the occupiers and the building contractor.  The Act entitles occupiers to pursue a claim against the contractor directly.
 

For any advice in relation to the Defective Premises Act 1972 or to issues raised in this article, please contact Andrew Turner on 01242 586 841 or aet@hughes-paddison.co.uk.