Defective Premises Bill 2024 passes second legislative stage

What’s this about?

The Defective Premises Bill 2024 passed its second legislative stage in the Assembly this week. The Bill aims to reform the limitation periods for claims related to defective or damaged buildings, aligning with legislative provisions in the rest of the UK and ensuring parity in legal recourse for building defects.

Currently sections 134 and 135 of the Building Safety Act 2022 (BSA) have taken effect in England & Wales, but they have no application in Northern Ireland.

The proposed changes will extend the limitation period for actions from 6 years to 15 years prospectively and from 6 years to 30 years retrospectively. These reforms come in response to a recent decision in Ulster Garden Villages Ltd v Farrans (Construction) Ltd [2024], where residents in Belfast’s Victoria Square Apartment Complex, were faced with an application for strike out of their claim on the basis of limitation, as proceedings were issued more than 6 years after practical completion.

Key Changes and Impacts

• The limitation period for defective building claims will extend to 15 years prospectively.
• A retrospective limitation period of 30 years will be introduced.
• This change aligns Northern Ireland's limitation periods with those in England and Wales.

Overview of the Bill: Substantive Clauses

Clause 1: Duties Relating to Work to Dwellings

• Extends the duty to cover works on existing buildings, not just new constructions as contained in the Defective Premises (NI) Order 1975

Clause 2: Limitation Periods

• Amends the Limitation Order to set the limitation period for actions under the Defective Premises (NI) Order 1975 and other related regulations to 15 years prospectively and 30 years retrospectively.
• Includes provisions to prevent the new limitation periods from applying to previously settled claims.

Clause 3: Defective Premises – Transfer of Functions

• Transfers functions under the Defective Premises Order (NI) 1975 to the Department of Agriculture, Environment, and Rural Affairs.

Affected Groups

Residents: Will benefit from the same level of legislative support if passed, as they would in other UK jurisdictions, ensuring greater protection against building defects.

Construction Industry Stakeholders: Developers, architects, landlords and construction companies could be open to legal action on projects that were completed several years ago. There has been substantive commentary that should the-legislation pass these stakeholders may also face increased liability insurance premiums, and as such, there are potential decisions for these Stakeholders regarding how to deal with these costs.

Conclusion

While this reform is a significant step towards improving residential building safety and addressing current legislative disparities between NI & GB, it does create more compliance and legal risk for those involved the construction industry. We will continue to track any amendments made to the bill as it goes through accelerated passage and provide updates on the potential impacts on Stakeholders. If, in the meantime, you have any concerns on how this new legislative regime could affect your business please get in touch.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2024. Specific advice should be sought for specific cases. For more information see our terms & conditions.