Defective premises: new life for an old Act?
This article was included in the summer 2011 issue of Informer - the real estate newsletter.
Despite an impressive 39 years on the statute book, most people will have had very little reason to consider the Defective Premises Act 1972. The purpose of the Act is to give owners (including subsequent purchasers) a right to claim against those involved in constructing new dwellings if defects in those works make the dwelling unfit for habitation.
However, after a period of relative obscurity, the Court of Appeal has twice been asked to consider the Act in the past 18 months, most recently in the case of Jenson v Faux. Is this the beginning of a resurgence in the use of the Act? It seems unlikely. But it is a timely reminder of the potential to face a claim under the Act whilst highlighting some of the limits of its application.
The works in the Jenson case were typical of many redevelopments involving: a loft extension, changes to room layouts, a side return extension and the excavation of a basement room. The Jensons bought the property after the works were complete, following which it was identified that the basement was prone to flooding due to a defective waterproof membrane.
Without a contract to sue under, the Jensons brought their claim under the Act against the original contractor. Importantly, there is no need for a contract to exist between the parties in order to claim under the Act - in fact the presence of a contract removes the protection of the Act.
As to the fact that the Act applies only to "new" dwellings, the Jensons argued that the extension works changed the property so considerably that it had taken on a "wholly different" identity. For all practical purposes, they said, it was a new dwelling.
Perhaps unsurprisingly the Court was not convinced that the works in the Jenson case constituted a new dwelling and the case failed. Interestingly however, the Court did indicate that in principle an extension could become a new dwelling, stating:
"There is no doubt a grey area within which it would genuinely be arguable that a dwelling had so changed that it had a different identity from before but works of extension or refurbishment works, to my mind, have to be much more substantial than they were in this case before such a grey area was reached."
What may tip the balance in favour of it being treated as a new dwelling? There are unfortunately no strict guidelines. Value of the works may will be influential, but certainly not conclusive. It will, it seems, be a matter of fact in each case and even then, in the Courts words, reach this "grey area". The prospects it seems of crossing the threshold are remote.
It was also interesting to note that as an aside in the judgment, the Court referred to the fact that Jenson had every opportunity to have the works surveyed. It seems that the old legal doctrine of "buyer beware" still has relevance even to defective premises.