What is the rectification period?
The rectification period is the period stated in the contract that provides for:
- the making good of minor faults; and
- omissions or items that fail to perform suitably that may be outstanding, or occur after practical completion has been reached and the contractor has handed the building over.
Without a rectification period, the contractor would have no right to re-enter the site/building to remedy the defects. Most standard forms of contract effectively give the contractor a licence to return to site for the purpose of remedying defects.
The architect/contract administrator must decide which items are defects within the definition in the contract and which, if any, are maintenance items. In the case of defects, the architect/contract administrator may (when they consider it genuinely necessary), issue instructions to the contractor to rectify the work before the schedule of defects is prepared at final completion at no cost to the employer.
Employer/contractor rights and obligations
The employer and contractor still have obligations and rights during this period. There may also be particular items of equipment, finishes and services under particular warranties/guarantees (e.g. roofing), which exceed the rectification period. These guarantees sometimes also require contractor sign off and periodic inspection until their expiry date. Care has to be taken by the employer not to void the warranties or contractor's responsibility, e.g. by using another contractor to undertake repair works on works or equipment associated with the completed main contract during the rectification or warranty period.
General maintenance items should initially be very few (particularly in a new building). It may be preferable for general maintenance and any routine servicing of equipment to be carried out by the main contractor or their sub-contractors under a separate instruction involving extra cost unless allowed for within the original contract. A direct order should be issued to the main contractor or appropriate specialist firm to carry out the work as a direct contract and this must be arranged with reference to the client.
What is a defect/defective work?
Defective work can be described as work which fails to comply with the express descriptions or requirements of the contract and can include drawings or specifications, together with any implied terms as to its quality, workmanship, performance or design. By definition, defects are breaches of contract by the contractor.
The general principle is that a defect in construction work amounts to a breach of contract, which entitles the employer to claim damages. The employer is entitled to recover the financial cost of remedial works for defects carried out either by themselves or another contractor. The contractor's liability in damages is not limited except by clear words in the contract.
Duration of the rectification period
For smaller projects a rectification period of 3 to 6 months may be appropriate while for larger projects a period of 6 to 12 months (minimum) is recommended, although 18 to 24 month periods are not uncommon. The employer should check with the architect/contract administrator to determine the most suitable period of time, and to arrange a process for the recording and referral of issues for action by the contractor.
The rectification period starts on the date of practical completion as stated in the certificate of practical completion.
The duration of the rectification period is usually stipulated within the appendix to each of the different forms of contract as a period of months from the date of practical completion. The default, unless a different term is stated within the appendix, is 6 months within the JCT Standard and Intermediate forms and 3 months within the Minor Works form.
There is really no reason to limit the period to 3 months because there is no connection between the contract period and the rectification period unless the works are very straightforward in nature or the likelihood of defects is minimal, such as in a demolition or strip-out contract.
In general, there is probably much to be said for inserting 12 months as the length of the period on the basis that the building will be tested against a full seasonal cycle of the year. Services, particularly heating and air conditioning systems will also have bedded in.
With longer rectification periods, the contractor may include a slightly increased tender figure. The final certificate will not be issued until cessation of the rectification period and the retention of the contract sum will be withheld until the satisfactory completion of all defects. This may be considered a harsh approach by contractors since an insignificant defect could potentially prevent payment of a relatively large retention sum
Payment of the retention sum should be triggered by the issue of the certificate confirming that all defects have been made good and the final certificate for payment. The retention sum will typically vary between 1-2.5% of the contract sum.