The Gazette 1978

GAZETTE

JULY-AUGUST

acquired title "after the owner of the dwelling for the time

being knew or should have known of the existence of such

defects or after a reasonable examination by a competent

surveyor architect or engineer would have revealed such

defects". In this context a "successor in title" need not be

an arms-length purchaser in the open market, but could

be the widow or child of a deceased purchaser. Such a

person could hardly be expected to arrange for a "reason-

able examination" of the dwellinghouse prior to accepting

an inheritance. Further, there are many "major structural

defects" which no reasonable examination will disclose

and the Dublin Solicitors' Bar Association anticipates

that this limitation will give rise to much expensive

argument and to ultimate injustice and hardship.

Apart from these general limitations, and weaknesses,

there are a number of specific exclusions from the

guarantee offered. These are as follows:

1. any defect consequent upon negligence, other than

that of the member (i.e. the builder) or his sub-

contractor;

2. any defect for which compensation is provided by

legislation, or which is covered by insurance;

3. any defect arising in consequence of drawings,

materials, design or specifications provided by or on

behalf of the purchaser;

4. any defect caused by or damage to anything not built

into the dwelling, pursuant to the contract of sale or

building contract entered into by the member and the

purchaser;

5. hair cracks, shrinkage, expansion, dampness due to

normal drying out of the dwelling, or condensation;

6. wear and tear or gradual deterioration;

7. consequential loss, whatsoever or howsoever arising;

8. any defect in central heating;

9. any defect consequent upon installation in or about

the dwelling by the member or otherwise of any lift or

swimming pool.

At first sight, the more reasonable exclusions might

cause one to overlook the unreasonable ones. It would be

hard to quarrel with items 1, 3 and 4 and, possibly, item

However, Insurance Companies who pay the loss

sustained by a house owner (as, for example, when a

house is damaged by water, following the failure of a

cistern in an attic) have always investigated and pursued

fairly stringently any claim for negligence by a builder.

They are hardly likely to be pleased by the attempt, in

item 2, to cut down their rights and one can imagine

Insurance Companies examining and possibly revising the

small print in their policies to counteract this provisión.

Item 5 seems reasonable, save for the exclusion of

"condensation".

The exclusion of "wear and tear", at item 6, seems

reasonable; we all know what "wear and tear" means, but

what is "gradual deterioration"? What if the gradual

deterioration is due to defective workmanship or

materials?

One can understand the desire to exclude "con-

sequential loss" at item 7, but one cannot understand why

it is necessary to exclude at item 8, any defects in a

central heating system.

Hitherto, such protection as a purchaser of a new

house has enjoyed has been provided in the purchaser's

contract documentation. The "Contract" in respect of the

purchase of most new houses comprises in fact two

separate documents. One is an Agreement for Lease (or

Grant or Transfer) which sets out the title of the developer

to the site and the form of deed whereby the site will be

assured. The other is a Building Agreement. This

normally provides that the builder will build the house in

accordance with certain plans and specifications, on the

particular site, at the agreed price. The normal Building

Contract contains, in addition, the following provisions

regarding defects:

1. a- specific guarantee against structural defects

(usually for 18 months);

2. a specific guarantee of the purchaser's Common Law

Rights and, often,

3. a specific maintenance period for other defects

(usually for six months).

The benefit of a "structural defects" guarantee and of a

"maintenance period" are self-evident, although their

extent depends upon the wording of the Building Agree-

ment. The guarantee of "Common Law Rights" is a less

widely understood concept, as the general public has little

or no idea to what rights at Common Law it is entitled.

There is an inherent danger that a specific "structural

defects" or "maintenance" guarantee could exclude the

purchaser's general rights at Common Law and, over the.

years, pressure from the Solicitors' profession, supported

by the financial weight of the major loan companies, has

ensured that the guarantee of the purchaser's "Common

Law rights" has become almost universal practice.

The Purchaser's "Common Law rights" comprise

certain unwritten undertakings which a Court will imply

into any ordinary building contract. The Law Reform

Commission, in its Working Paper mentioned above,

described such implied undertakings as follows:

in every building contract there was to be

implied (in the absence of express words to the

contrary) a three fold undertaking by the builder:—

1. that be will do his work in a good and workman-

like manner;

2. that he will supply good and proper materials;

3. that the house will be reasonably fit for human

habitation."

It has been suggested recently by at least one Building

Company, which is selling houses with the benefit of a

Guarantee under the Scheme, that such Guarantee should

be accepted in lieu of the purchaser's rights at Common

Law. The Association has been asked by members to

formulate a policy on this point and to notify its members

of its view. Having considered the matter carefully, the

Association is of the opinion that there should be no

question of accepting such a limited Guarantee in lieu of

rights at Common Law and that a guarantee of Common

Law rights remains as important as it ever was. The

Association hopes that most Solicitors and the main

• lending institutions will agree. Failing the preservation of

Common Law rights, Purchasers might have no remedy

for items such as warped doors, defective plumbing,

defective wiring, defective central heating, defective

boundary walls, leaking roofs, defects caused by omission

of a damp proof course (not structural), the omissions of

ties in a cavity wall where no structural damage followed,

and many similar defects, which arise all too regularly,

but which escape the narrow limitations imposed by the

Scheme's very limited definition of "major structural

defect".

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