When and how to claim construction defects?

Procedural Law (227), Construction Industry (2644), Claims (2823), Construction Defects (2942)

8 Feb 2024

As lawyers for companies in the construction sector we know from experience that claims for construction defects are the order of the day. When a work is executed, it is not infrequent that the dreaded construction defects arise, which can be more or less serious, but whose repair the injured party will always want to claim from the construction company or the company that has intervened in the repair or construction in question.

Faced with this situation, there are many unknowns for the parties involved, which we will try to resolve in this article. On the one hand, those injured by such construction defects usually ask themselves, among others, these questions:

Can I claim compensation or reimbursement of the costs incurred in remedying the construction defects, instead of claiming for their repair?
Who is responsible for this construction defect claim?
How long do I have to claim for construction defects?

On other occasions, it is the different construction agents who hire us (developers, builders, architects, designers, project designers, project management, etc.) or even their insurance companies, who ask themselves these same questions, but in the opposite way with these frequent doubts:

Why am I being asked for compensation instead of having the construction defect repaired?
Am I obliged to pay, or can I remedy?
How far does my liability for construction defects extend?
Is the claim time-barred?

Throughout this article we will answer these questions, but in reverse order, starting with the deadlines within which the company responsible for the construction defect has the obligation to respond.

1. Time limits for claiming construction defects

- Deadlines according to LOE

Although there are other deadlines that we will see throughout this article, all experts in the construction sector are familiar with the annual deadlines "1, 3, 10" of the Ley de Ordenación de la Edificación (hereinafter "LOE"), but what do these deadlines mean?

They are warranty periods, which means that, as long as the construction defects have appeared within these periods -which are counted from the Acceptance of the Work-, someone will be able to claim and the responsible construction agent will have the obligation to respond (as long as the claim is made within the period we will talk about later). The deadlines for claiming construction defects refer to the following eventualities:

1 year for finish construction defects or aesthetic defects, such as missing trim, poor paint finish, scratched or scuffed elements, stained tiles, etc.
3 years for construction defects of habitability; these are construction defects that impair the comfort and habitability of the building, but do not affect its stability, such as, for example, leaks, dampness, thermal or acoustic insulation defects, bad odors, defects in the electrical installation or piping, etc.
10 years for structural construction defects, i.e., those that may endanger the stability and safety of the building, such as detachment of facades, deep cracks, etc.

These terms are of expiration, that is to say, they are non-extendable terms, so that all those construction defects that arise once these terms have expired cannot be claimed.

However, in order to claim for construction defects arising within these warranty periods, the claim must be made within two years after the defect or construction defect arose. It is very important to emphasize that these two years are computed from the time the construction defects occur and not from the end of the warranty period.

Consequently, if no claim is made within two years from the time the construction defect became known, it does not matter that the warranty period has not ended, since the claim will not be viable.

For example, if in the first year after delivery of the work, we detect a construction defect affecting structural elements of the building, but we do not claim it until the fifth year, that claim will be time-barred, although the warranty period for structural defects is still in force.

It is therefore very important to be able to determine when the claimed construction defect actually arose.

In any case, it should be taken into account that the two-year period for making a claim is no longer an expiration period, but a limitation period. This means that any credible claim will interrupt the statute of limitations, so that the biennial computation will be restarted again to claim judicially for that construction defect.

- Time limits according to the Civil Code

Likewise, as we anticipated, there is another term apart from the ones we have just explained, which is 5 years to claim the constructive defects by exercising a contractual action of the Civil Code against whoever has been party to the contract, in which case it will be claimed for breach of contract. As the previous one, this term is also of prescription and it will begin to compute since the constructive defect arises, as well as since each one of the reliable claims.

2. Who is liable for the construction defect? What is the extent of the liability of the intervening agent?

Regarding the other question that our clients usually ask themselves, in relation to the liability of the agent for the construction defect, the LOE establishes that it is the claimant who must individualize the liability and, only in the case that it cannot be individualized, it will be possible to claim jointly and severally against all the agents.

Therefore, it will be necessary to consider the specific circumstances and, above all, the particularities of the construction defect in each case in order to correctly analyze the claim.

3. Indemnification vs. remedy of construction defect

Finally, as regards the type of claim for construction defects and the possibility of requesting compensation or reimbursement instead of repair, our Courts are inclined towards in natura repair, that is to say, that the construction agents do not have to bear a monetary compensation for construction defects, unless the repair is impossible, so the injured party must always claim firstly the repair of the construction defect, and only in the event that this is not possible, such claim may be translated into a financial compensation.

For this reason, it is very important to analyze each specific case before making any repair and to obtain an expert report through an independent expert (normally an architect) that accredits the causality of the construction defect.

As can be seen from the above, it is highly recommended to have expert legal advice in construction law, which analyzes the specific case to adopt the best solution, for which our lawyers are at your disposal.