Who is Legally Responsible for Defects in Construction?

Liability for construction defects usually falls on either the architect/engineer, or the contractor and subcontractors. Here are the key legal issues.

There are two basic types of construction defects: defects that occur during the design of a home or building, and defects that occur during the building phase. As a general principle, an architect or engineer is usually responsible for defects in the design of a construction project. A builder, usually a contractor or subcontractor, is usually responsible for defects caused by a failure to conduct work according to design specifications.

A construction defect can cause a variety of problems.

  • It can necessitate additional costly work to repair the problem.
  • It can cause injuries to construction workers.
  • It can cause injuries to other people, such as future occupants of a building or pedestrians passing by the site.

This article discusses who will be responsible for construction defects. First, we'll describe some key legal concepts that are useful in evaluating liability in particular situations. Second, we'll identify situations that might result in responsibility for particular parties.

Key Legal Concepts in Construction Defect Cases

Contracts

The law of construction defects is largely based on contract. Think about how many contracts might be involved in a single construction project. The owner of a building enters into a contract with an architect to design plans for a renovation. The architect enters into a contract with an engineer to review drawings to make sure they comply with engineering principles. The owner then contracts with a general contractor to implement the plans. The general contractor contracts with a dozen subcontractors to assist in implementation.

Every one of those contracts will probably have provisions indicating which party will be responsible for which type of defect. So, when construction contracts are negotiated, it is critical for the parties to pay close attention to the liability provisions. The result of all of this negotiation is usually that liability is passed down the chain. In other words, the owner will require the general contractor to accept responsibility for defects. The general contractor will then require each of the subcontractors to accept responsibility for defects.

Indemnification

This passing of liability is often done with “indemnification” provisions. If a subcontractor indemnifies a contractor for certain liability, it means that the subcontractor guarantees that if the contractor is later sued, the subcontractor will pay for any judgments that are rendered against the contractor. As a result, subcontractors often carry insurance policies protecting them from liability for defects. So, at the end of the day, many lawsuits resulting from construction defects are paid for by insurance companies.

Examples of Liability for Construction Defects

As the discussion above illustrates, liability is often passed down to subcontractors under the terms of the network of contracts that accompany a construction project. But specific situations can lead to liability for any party involved in a construction project. Below, we'll spotlight a few of these scenarios.

Subcontractors

  • A person falls out a window that was not properly secured to a window frame.
  • A roof collapses because a subcontractor used sub-standard wood to build it.
  • An occupant receives an electric shock when turning on a light because wires were left exposed.
  • A ceiling must be replaced because a plumber installed a leaky pipe beneath a second floor, leading to water damage.

General Contractors

  • Usually, anything that subcontractors would be liable for, general contractors may also be liable for (with the caveat that if the contractor has to pay for damages, the subcontractor who is legally responsible will often reimburse the general contractor).
  • The general contractor conducts faulty work itself (without the use of a subcontractor).

General contractors and subcontractors are generally held liable on the theory of negligent construction.

Architect

  • A person falls down a staircase that was designed in such a way so as to give people little or no visual warning of its existence.
  • An explosion causes injuries as a result of an architect’s failure to indicate (on planning documents) the location of underground gas lines.

Engineer

  • A roof collapses, injuring home owners despite the fact that no building errors occurred -- in other words, the home was built according to plans that were approved by an engineer.
  • A relatively new bridge collapses, even though the project was carried out according to the engineer's exact specifications.

Property Owner

  • The owner visits the construction site frequently and consistently engages in decision-making with respect to safety issues. In this way, the property owner may open him/herself up to liability if something goes wrong.
  • The owner fails to provide barriers to keep children away from dangerous construction operations when the site is in a neighborhood where many children live (depending on the circumstances, liability to extend to a number of parties in this situation).

When Someone is Injured

If someone is injured due to a construction defect, they likely have the right to sue the liable party. See Liability for Injury Caused By a Construction Defect to read up on the legal issues that follow.

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