Third party rights for latent defects in buildings

Properties are intended for use over many years. The risk of a latent defect manifesting and resulting in damage to the property many years after it has been built is present in negligently constructed properties. The legal position in relation to the rights of an aggrieved property owner in the context of latent defects is highly complex and uncertain. Where the owner had employed the negligent party responsible for the latent defect, he would be able to sue him for breach of contract provided, the defect surfaces during the contractual liability period. If he had not, then the owner will face the uncertainty presented by the law of tort in relation to recovery for purely economic losses. The uncertainty is evident when the English position is contrasted with the other Commonwealth jurisdictions. Even if the purchaser had been assigned contractual rights against the negligent participant, he may face difficulty in enforcing those rights. In addition, the existing legislation providing property owners with rights for defective work does not appear to address latent defects which surface outside the contractual liability period. The legislation that does affect latent defects, however, presumes a common law right exists in the first place. Finally, even if property owners are allowed to succeed against the negligent party in law, the negligent party may become insolvent. This is particularly significant as it in effect leaves property owners with no real remedy.