The Defective Premises Act

Section 1 of the Defective Premises Act 1972 provides that any developer or contractor taking on work in connection with the provision of a dwelling owes a duty to every person who acquires an interest in the dwelling.

This is to see that the work is done in a workmanlike or professional manner with proper materials so that the dwelling will be fit for habitation when completed. That statutory "fitness for purpose" duty is owed to the purchaser of the dwelling or to any subsequent purchaser.Section 1(5) of the Act says that any legal action brought under this statute must be brought within six years of the time when the dwelling was completed.

This limitation period is subject to a proviso that if any further work is done to rectify defective work in the dwelling, the cause of action "shall be deemed to have accrued at the time when the further work was finished". These provisions were examined earlier this year in Alderson -v- Beetham Organisation.

In May 1994, Beetham completed the conversion of a property in Liverpool into flats and in January 1995 Mrs Alderson and her daughter agreed to buy two basement flats from the development. In April 1995, before moving in, the Aldersons noticed black mould and fungus growth on the bedroom walls of both flats. A meeting was arranged with Beetham and it was agreed that there appeared to be a problem.

The solution proposed by Beetham was that flagstones outside the flats should be relaid at an angle to the external wall and that extra drainage pipes should be installed under the pathway running alongside the flats.

These works were carried out in May 1995 and shortly afterwards the Aldersons moved in.Three months later, in Sept-ember 1995, there was heavy rain. The Aldersons' basement flats flooded, resulting in the fire service pumping the basements dry and removing the sodden carpets. It was clear that Beetham's work to the flagstones and external drainage had not solved the problem. But Beetham did not propose any further solution.

Accordingly, the Aldersons instructed a chartered surveyor. He reported that the flats had been constructed in breach of the terms of the Defective Premises Act 1972. In his view, the flats had not been made habitable as the underground accommodation of the flats had not been properly tanked and therefore did not have adequate damp-proofing.

He advised removal of all fittings so that substantial alterations could be carried out to provide adequate tanking. He recommended that the Aldersons should be compensated for their purchases and should receive further compensation for the considerable disturbance and inconvenience caused after they moved in to the flats.

That was in November 1995, but Beetham did not undertake further remedial works. However, it was not until January 2001 that the Aldersons commenced legal proceedings. Beetham's response was to claim that the limitation period had expired and that the action against it should be statute barred.

It contended that the cause of action had accrued at the date the dwellings had been completed in May 1994 and thus the limitation period had expired in May 2000. It applied to the court that the action commenced in January 2001 was too late and that it should be struck out. The Judge agreed and the Aldersons' claims were dismissed.

In April this year, however, that dismissal was reconsidered in the Court of Appeal. Lawyers acting on behalf of the Aldersons argued that the relevant limitation period did not commence from completion of the original building works, but started from the time when Beetham had carried out the further ineffective works in May 1995.

On this footing, the relevant limitation period of six years did not expire until May 2001 at the earliest, therefore the proceedings had been commenced sufficiently in time regarding the proviso in Section 1(5) of the Act. Beetham argued that if it had carried out work to rectify the defective tanking and had done that work in such a way that the dwelling was still not fit for habitation, then a new cause of action would have accrued from the date of that further work. But Beetham argued that that is not what happened.

It had not done any work to the tanking. All that it had done was to rectify the position of the flagstones and the external drainage. As that work had been carried out competently and was not the cause of the alleged damage, the Aldersons' claim should fail.

Lord Justice Aldous rejected that contention. It was the damp that had rendered the flats unfit for habitation and the reason for the further work carried out by Beetham was to rectify the damp problem.

He said that it would be odd that a builder that does half a job in a workmanlike manner should not be liable for failing to rectify the problem that caused the house to be unfit for habitation, whereas a builder that attempted to do a whole job could be liable.

There was every reason to conclude that Parliament intended that there should be a fresh cause of action for breach of the duty to provide a dwelling fit for habitation when the further work did not rectify the original work as intended.

In conclusion, the six-year limitation period provided by Section 1(5) of the Act did not expire until May 2001 at the earliest. The appeal was allowed and the Aldersons could properly claim damages for Beetham's failure to rectify the originally defective work to the basement flats.