The defects period is one of the most misunderstood provisions in a building contract. Employers frequently treat it as a general right to have anything put right at any time; contractors frequently treat it as finished once the site has closed. Both readings cause retention to sit unreleased, which is why the period is examined in a retention recovery assessment.
What the period is called and how it operates differs between forms. The shape is consistent: a defined length, an obligation to make good items notified, and a document at the end.
What it is
A period, stated in the contract particulars, running from practical completion, during which defects appearing in the works are notified and put right.
It is a right for the contractor as much as an obligation: generally the contractor is entitled to return and remedy its own work rather than being charged for somebody else to do it.
Employers who engage others to fix defects without first allowing the contractor to return frequently weaken their own position.
What it is not
It is not a warranty period covering anything that goes wrong. It covers defects, meaning work that did not comply with the contract.
It is not a mechanism for obtaining improvements or for correcting things the employer dislikes but which comply.
And it does not extinguish the contractor’s liability for defects after it expires, which is a separate question governed by other provisions and by law.
The schedule at the end
Most forms require a schedule of defects to be issued within a period after the end of the defects period, listing what remains outstanding.
That schedule is important because it defines what has to be done before the certificate of making good can issue, and therefore before retention is released.
Items added after the schedule, or long after the period expired, sit on weaker ground than items notified in time.
Items notified late
Defects appearing after the period are not necessarily the employer’s problem, but they are outside the retention mechanism.
Holding retention for items notified a year after the period expired is a position that will not usually survive examination.
Where genuine later defects exist, the remedy lies elsewhere in the contract rather than in continuing to hold the balance.
Making good in practice
The contractor returns, deals with the items, and the work is inspected. Each of those steps should be recorded, because the record is what supports the certificate.
Where items are disputed, dealing with the undisputed ones and recording the disagreement on the rest keeps the sequence moving.
Allowing one contested item to hold up the whole certificate is the commonest way a defects period becomes a retention dispute.
Access and the occupied building
By the defects period the building is usually in use, which makes access the practical constraint rather than willingness.
Contracts rarely say much about this and the parties have to arrange it, which means delays caused by access should be recorded rather than absorbed.
A contractor refused access and holding the record is in a very different position from one that simply did not return.
Where the period is extended
Some forms provide for the period to be extended in respect of work that is itself remedied, which can push the end date later for particular items.
That is specific rather than general: it does not extend the whole period, and it should not be used as a reason to keep the entire schedule open.
Reading what your contract provides is worth the few minutes, because practice varies and assumptions differ.
What to record throughout
The notification of each item with its date. The response. The work done and when. Any access difficulties. And the inspection or acceptance.
Those records are what allow a schedule to be closed out rather than argued about.
They are also the records least likely to be kept, because by this stage the project team has moved on.
Closing it properly
Both parties benefit from a formal close. The employer gets a complete project and the contractor gets its retention.
Where items remain genuinely outstanding, agreeing a value for them and releasing the balance of the retention is frequently the sensible commercial answer.
Holding the full balance against a small number of modest items is disproportionate, and it is a position employers lose more often than they expect.
Defects used as leverage
Defects lists sometimes grow at precisely the moment a contractor begins pressing for retention, which is a pattern both sides recognise.
Where the items are genuine they should have been notified earlier; where they are not, they will not survive examination.
Either way the answer is the same: deal with them formally, item by item, with dates. A list that cannot withstand that treatment usually disappears. Where the dispute is really about the whole account, final account dispute review is the piece of work that fits.
Who pays for the return visits
Making good defects is at the contractor’s cost where the work did not comply. Attending to items that turn out to comply is a different matter.
Where an employer raises items that are not defects, the contractor may be entitled to the cost of investigating them, depending on the contract.
Recording what each visit was for, and what was found, is what makes that distinction possible later.
Where it fits
The defects period is the step that most often stalls the retention sequence, which is why it is examined early in a retention recovery assessment.
Where the dispute is really about whether completion occurred at all, that is a different question with different consequences.
Administering the period properly is contract administration work, and it is what keeps retention from becoming a dispute.
Retention that has not come back?
A retention recovery assessment establishes the balance from the certificates, fixes the release dates from the contract and sets out what has to happen before the money falls due.