Property

Is it too late to get the builder to fix major defects in an apartment block?

Property Clinic: A six-year limit is set on actions taken due to property damage

One contractor came down from a roof inspection and said, ‘I cannot believe how this was ever signed off as being adequate.’ Photograph: iStock

Tue Mar 15 2022 - 06:00

I am chairperson of the owners’ management company (OMC) of an apartment development of 160 units. The development was built in 2002 and about eight years ago we began to have serious issues with the roof, leaks etc. We obtained a survey, and this identified and costed the required repairs. We sought legal advice in relation to possible action against the builder on the basis that the initial construction was clearly substandard.

One contractor came down from a roof inspection and said, “I cannot believe how this was ever signed off as being adequate, but given the year it was built it was probably never signed off properly”.

We sought legal advice and were advised that the statute of limitations was the problem and that the limitation period began not when an occupier would notice the defect, ie when the leak began, but when a competent surveyor would have seen the defect when looking for it. We were about five years late and were advised that it was pointless pursuing the builder. We felt we had no option but to prioritise the work and get it done at our expense over time.

Subsequently issues of fire-stopping arose, with a similar outcome, and then an issue about the fire alarm system which appears to have been installed incorrectly when built. This was identified to us only recently – notwithstanding the annual servicing of the system never having picked up the defects. Litigation against the builder will presumably face the same issue with the statute of limitations.

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Is there any course of action open to us? Certainly, an extension of the statute of limitations is long overdue as it currently plays into the hands of unscrupulous builders. Even a change to the law wouldn’t help us, as it is unlikely to be made retrospective.

Siobhan Durkan writes: Under the Statute of Limitations Act a six-year limitation is set on possible actions taken due to property damage. A cause of action accrues at the earliest time at which an action can be brought. If an action is not commenced within the limitation period, it will be statute barred and the defendant may have a good defence to the claim.

The Supreme Court delivered a judgment in the case Brandley v Deane [2017]IESC 83 dealing with the statute of limitations insofar as it relates to property damage claims.

The court accepted “that there is a definite distinction between a ‘defect’ and the subsequent damage which it causes. Time runs from the manifestation of damage, rather than of the underlying defect. Thus it is not the latent defect which needs to be capable of discovery, it is the subsequent damage caused by that latent defect”.

The court held a discoverability test should not apply but that the statutory period of limitation should run from when the damage became “manifest”.

Mr Justice McKechnie said “it is not so easy to pin down precisely what is meant by ‘manifest’, and especially how one might differentiate it from the ‘discoverability test’ as it appears in case law. From a reading of the case law, I understand ‘manifest’ to mean the date on which damage is capable of being discovered by a plaintiff”.

Although the Brandley case was specific to the facts therein, the court’s decision confirms that a cause of action in damages, for a non-personal-injury claim, accrues only at the time that “damage” becomes “manifest” that is when it is capable of being discovered (irrespective of whether it has or has not been discovered or ought to have been discovered). The law therefore potentially would allow claims to be brought many years after, for example, a defective foundation had been put in place.

In O’Donnell v Kilsaran Concrete [2002]1 ILRM 551 the presence of pyrite in construction blocks was regarded as a latent defect, but one which might never cause damage. Therefore, the cause of action in negligence based on the presence of pyrite in the blocks was held to accrue when damage was caused to the building due to a chemical reaction in the blocks caused by the presence of pyrite.

The court drew attention to the fact that no evidence was adduced by the defendants to refute this claim, notwithstanding the fact that a joint inspection was carried out and that the defendants offered no evidence to contradict the evidence of the plaintiff’s expert that the damage was of “recent origin”. On that basis, the court concluded that the cracking which occurred due to the excess of iron pyrites in the blockwork did not develop until well within the limitation period.

In conclusion, case law would seem to fit the facts of the problem you ask about, as follows: the defect occurred when the roof was constructed; the damage occurred when the leaks began, ie the damage was a result of the defect; and the cause of action will have begun to accrue at a time when the person ought to have discovered this damage.

The issue here would seem to be whether the actual discovery of the damage was at the same time or after the manifestation of that damage. Regardless of this, it has now been more than six years since leaks were discovered, meaning the OMC could now be statute barred from bringing any action.

Regarding the fire alarm system, more information would be needed with regard to how they eventually discovered that it was defective. Was there some sort of damage caused? Presumably the manifest damage test or the damage being “capable” of discovery by the plaintiff would not come into effect yet if the regular annual servicing carried out by a professional was not able to pick up on a defect?

Given the complexity of the issues involved, further legal opinion – from a solicitor and a barrister – should be sought as to whether the statute of limitations would be a bar to any action as specifically relating to the facts in this case.

Siobhan Durkan BCL is a partner at P O'Connor & Son Solicitors, poconsol.ie

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