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NEC ECC: Can a defect become a latent defect after defect certifcation if not resolved sooner?

+1 vote
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Following completion and handover of a recent building refurbishment an issue arose prior to the defects date with condensation forming in the new loft space on the steel trusses during cold weather (heating on within the room below). The water droplets ran down the trusses and/or dripped onto the new ceiling creating stains.

This issue was raised as a defect and, following inspection, the Contractor was adamant that everything has been competed in accordance with the Works Information. As a design and build project with poor works information throughout, there was a reluctance for the Client to agree with this. Lots of discussions ensued and a building surveyor was brought in by the Client for advice. the Contractor did the same and opinions differed.

The boiler flue was found to run up through the loft space and, despite no issues prior to the refurbishment contract took place, the Contractor was confident that this was  causing the problem and not the creation of the new loft space itself (new fire curtains, fire stopping, ceiling grid and insulation.

The Client subsequently agreed to a process of elimination by funding the insulation of the flue to establish whether it prevented alleged heat loss into the loft.
The defects date is now about to pass and the "heat on" period is about to commence to test the issue and see if it has been resolved.

Retention needs to be released following issue of the defects certificate and the Contractor (whilst extremely trusted) is asking for the defect to no become a "latent defect" and the retention be paid in full.

Contractually, can the original defect now become a latent defect and, what ramifications may there be if the retention is paid in full?
asked Oct 7 in NEC3 Testing & Defects by Mr Inquisitive  
   

1 Answer

+1 vote
This is a complicated question and the answer would really depend upon what the Employer's Works Information said; what the Contractor's Works Information said as well as whether option X15 was used.

However, in principle, I believe it could become a latent defect but the Employer would lose the obvious ability to reclaim - by not paying back - the the costs of getting it corrected.

A compromise - ideally by agreement,  but you could say it is a Defect already - could be to make an estimate of the most likely cost to repair if the test fails and deduct that amount you pay back from the Contractor. If it passes, then pay that money back.
answered Oct 9 by Jon Broome (25,060 points)