On 8 th July 2020 Chancellor Rishi Sunak, announced in his Summer Statement a “stamp duty...
Can you trust Building Inspectors' certificates?
In a construction project, a Building Inspector examines the works to certify that they comply with the Building Regulations. A Final Certificate is issued confirming that they have fulfilled their duties under the Regulations. The certificate is often accepted by subsequent parties as sufficient evidence that the property has been built properly.
If it is discovered that the property hasn’t been constructed properly, a party may look to take proceedings against the Inspector. The Inspector is usually employed by the builder or developer, who no longer has an interest in the property. It is the new owner that looks to make a claim.
There is no contractual relationship between the new owner and the Building Inspector and so there is no claim in contract. A collateral warranty probably won’t have been provided. Since the decision in Murphy v Brentwood Borough Council, it has also been the case that there is no claim in negligence. This case involved local authority building inspectors. The point as to whether approved inspectors owe a duty of care has not yet been decided, although it is unlikely that a party would take the risk of pursuing such a claim.
Parties have considered making claims under the Defective Premises Act 1972 (“Act”) and negligent and/or fraudulent misrepresentation. Recently, a claim under the Act has been considered by the High Court and Court of Appeal.
The Lessees and Management Company of Herons Court v Heronslea Limited and Others arose from the construction of a block of flats. Significant defects were found which would cost about £3 million to repair. One of the defendants was the Approved Building Inspector who had issued a Final Certificate. The certificate confirmed that he had complied with his duties under the Building Act and that the building works complied with the Building Regulations.
It was held in the High Court that an Inspector is not a person who takes on work for, or in connection with, the provision of a dwelling. Therefore, an Inspector would not have a duty under the Act and is not liable under that Act. This was considered by many as a surprising decision, bearing in mind the role that an Inspector undertakes in the construction of houses and checking that they have been built properly.
Leave to appeal the Herons Court decision was granted. In giving leave, Lord Justice Coulson said: “The role played by Approved Inspectors is a critical one in the UK Construction Industry. It will be important and useful for the precise nature and scope of the role to be the subject of up to date guidance.”
The Judgment was eagerly awaited and it was hoped that the Court of Appeal would fully review the role and liability of an Inspector. Unfortunately, in a judgement delivered on the 14 August the Court did not take advantage of this opportunity and only dealt with the claim under the Act. It upheld the original judgement and dismissed the claim against the Inspector. It held that, as the Inspector’s role was not a positive role in actually building a property, they did not fall under the terms of the Act.
It will be very difficult to make claims against Inspectors. Their Final Certificates, for so long relied upon by many, must be treated with caution and cannot be relied on to confirm that a property has been built in accordance with the Building Regulations.