Readers are concerned with the nitty gritty this week. Did completion mean practical completion or not? Was it a bank or a public holiday? More importantly, to pay or not to pay?
Malcolm Taylor’s response (8 April, page 25) to my article about the problems associated with defects that emerge after completion (18 March, page 47) raises a valid and important question. Did “completion” in this case mean “practical completion” or, in other words, during the defects liability period? Or did it mean after the issue of
the final certificate?
Given the protracted court proceedings involved in sorting matters out, Taylor’s hunch that the defects came to light after the latter of those dates was spot on. Indeed, the defects came to light no less than 10 years after “practical completion”. Had we been talking about defects that came to light before “practical completion”, and had the affected party been the employer under the building contract, there can be little doubt that it would have been able to recover a substantial part - but not all, given the amount involved - of the remedial costs incurred, without much difficulty.
However, in this case, although the contractor was a party to the action, by the latter stages of the proceedings the parties actually in the frame were the M&E specialist contractor and a sub-sub-contractor. Also, the claimant was not the employer but, instead, the sole tenant following practical completion of the works, whose business was disrupted when the defects emerged. Its claims, both against the building contractor and the M&E specialist, were based not upon the building contract but instead upon collateral warranties that it had received from both those parties.
Yes, the position is complicated enough for a tenant where defects come to light after the defects liability period has expired. If he does go into occupation before then
he would be well advised to ensure that the contractual arrangements with both the building contractor and the employer expressly give him the ability to have recourse to available retention monies sitting in the employer’s bank account. Otherwise, he will have to slug it out in the courts in what are inevitably highly complex, protracted and expensive multi-party proceedings.
Dominic Helps, Corbett & Co
No rights to pay
Regarding your story, “Firm trying to duck royal holiday pay” (5 April, building.co.uk), it is only a public holiday, not a bank holiday so there is no immediate entitlement to a day’s pay. While workers will feel cheated, it is up to them to decide if they don’t work and take it as a paid day’s holiday. Ucatt needs to understand that paying a labour workforce of, say, 20 men, £150 a day is a straight loss of £3,000.
‘Serials’, via www.building.co.uk
Pays to get it right
The previous comment is not correct, there is no technical difference between public or bank holidays in terms of whether you are entitled to take it as paid leave or not. Everyone in the UK is entitled to a minimum of 28 days paid holiday if they work a five day week. The situation with regard to extra bank holidays will depend on your contract.
Joanna Marshall-Cook, via www.building.co.uk