New Homes defective boundary features - who is responsible?

A recent High Court decision in Thomas and Another v Taylor Wimpey Developments Limited and Others (May 2019) has shed some light on the question of who is liable for repair of defective workmanship to a boundary feature belonging to a new home. This case involves a new home built during 2006 where the transfer from the developer to the purchasers took place in early 2007.

In 2015 the owners became aware that certain retaining walls along the boundary of the property constructed of logs were inadequately built and defective. The owners brought claims against both the developer and NHBC.

The claim

The claim against the developer were brought as claims for misrepresentation and breach of the Defective Premises Act. Both these claims were time barred and so the owners were unsuccessful. They had sought to argue that the developer also owed them a duty of care in negligence. This would have allowed them the opportunity of bringing a claim within three years of becoming aware of the defect. Relying upon long established precedent the Court decided that no duty of care was owed because the only loss suffered was the economic loss arising from the costs of remedying the defect in construction.

The owners claims against NHBC under its standard 10 year new homes warranty also failed because upon examination of the terms of the warranty, protection was only available for retaining walls necessary for the structural viability of the house, bungalow, flat or maisonette or its garage or other permanent out building. In this case, the retaining log wall was merely a boundary feature and had no impact upon the structure of any buildings. Therefore the owners’ claims failed on this ground as well.

The decision

The case is noteworthy for reaffirming that there is no basis for claiming compensation under the law of negligence where the only losses are the economic losses.

The case emphasises the importance of bringing claims promptly within the limitation periods available. Had action been taken earlier claims in misrepresentation, under the Defective Premises Act and also under the developer’s contractual obligations to carry out the building works with reasonable care and skill could have been pursued.

Finally, this decision highlights the relatively limited scope of NHBC protection. Many purchasers assume the NHBC Buildmark cover provides comprehensive protection against all defects. However this is limited not only in time but also in relation to the scope of the defects which are covered.

In this case, the owners were unable to successfully claim against any of the parties and will have to deal with the costs of making good the defects at their own expense.