The Gazette 1978

GAZETTE

JULY-AUGUST

19

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". (Continued on page 84]

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 9. 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

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