Peeters Act: better protection for the developer?

A new act has been in force since 1 July 2018. One which makes it obligatory for not only architects but also contractors and other service providers within the construction sector (engineers and consultancy firms) to take out insurance in order to cover their ten-year period of liability.

This new act makes it compulsory for all contractors, architects and also any other service providers from the construction sector to take out insurance in order to cover the ten-year period of liability for all works (renovations and conversions) carried out on homes and buildings (primarily designed for private occupancy) for which the intervention of an architect is a compulsory requirement.

As a result of this new Peeters-Borsus act, this insurance obligation which already applied to architects now applies to the other construction actors involved too.

This insurance obligation applies to works covered by a final environmental permit (formerly planning permission) issued after 01/07/2018.

Why?

The legislator has two aims to be achieved by passing this act:

• To remove the discrimination between contractor and architect
• To protect the developer against the insolvency of the contractor

For sometimes, defects can arise months or even years after the acceptance of building works. The architect and now the contractor too will remain liable for some of those defects for 10 years.

Which defects come under the ten-year period of liability? And what should we understand by the insurance of the ten-year period of liability?

WHICH DEFECTS COME UNDER THE TEN-YEAR PERIOD OF LIABILITY?

Defects which are hidden or not clearly visible

The ten-year period of liability applies to serious defects which can affect the rigidity, stability and water tightness of the building, regardless of whether the defect is visible or hidden. Consider weak foundations which cause the walls to subside or an incorrect roof structure, for example.

In principle, the ten-year period of liability will start from the final acceptance of the building works, unless otherwise stipulated in the contract. In practice, the ten-year period of liability will often start at the time of provisional acceptance.

If, for example, the construction of a housing complex consisting of various blocks at the same site is carried out in various stages, then the ten-year period of liability for each of these individual buildings will start at the time of acceptance of that individual building.

If the contractor or architect is liable for the defect, they can be sentenced to carry out the necessary adjustments or repairs or to pay compensation for damages.

Minor hidden defects

Minor hidden defects – such as a leaking roof – are, as the name suggests, not visible at the time of acceptance of the building. They are regarded as “minor” because they do not put the stability of the building at risk.

In order to be able to make a claim based on a minor hidden defect, it must be reported within a reasonable period of time, i.e. the consequences must not be more serious than the defect itself.

These are different to the defects which were visible at the time of acceptance of the building.

WHICH DEFECTS DO NOT COME UNDER THE TEN-YEAR PERIOD OF LIABILITY?

Minor visible defects

Minor visible defects like a crack in the floor of the communal areas do not fall under the ten-year period of liability because the developer has approved and accepted the works without reserve.

Defective maintenance such as the lack of or defective maintenance of gutters, for example, or wear to a property do not fall under this.

WHAT IS THE BEST THING TO DO?

If you discover a defect (which falls under the ten-year period of liability), the best thing to do is to contact your architect or contractor first of all in order to report the problem. If this does not lead to a response, then a somewhat harsher form of communication will be required such as a registered letter, for example. If you still get no response after that, then you would do best to consult a lawyer.

SUMMARY

The compulsory insurance of the ten-year period of liability is certainly something to celebrate. Certainly from the standpoint of the developer who is better protected thanks to the Peeters-Borsus act. But the compulsory insurance could increase the cost price of conversion or building works…

Therefore it remains of great importance for the final acceptance of a building to be carried out carefully. This could prevent possible discussions in the future, certainly in the case of the more complex forms of co-ownership such as a large residential site with various member associations for which various final acceptances are required, for example.

Would you like to find out more about the ten-year period of liability? Then do not hesitate to contact the legal department of property administrator Syncura by calling 055335575 or by sending an e-mail to info@syncura.be.