Notifying construction defects: the first weeks

Construction defects rarely show up on the day of handover. A crack in a wall, damp in the basement or a façade that starts to stain after two winters usually appears only after some time. When defects do appear, the legal position is often less of a problem than the question of what can still be proven later.

The clock starts at handover

For buildings the warranty period is generally three years from handover (§ 933 ABGB). The defect must come to light within that period; the warranty rights become time-barred three months after it ends (§ 933 Abs. 3 ABGB). If you have notified the defect within that limitation period, you can still raise it, without limit in time, as a defence against the contractor's claim for the contract price. Alongside this there may be damages claims with their own limitation period, namely three years from knowledge of the loss and of the party responsible. Contractual provisions, for instance under ÖNORM B 2110, can change the timeline further; in construction contracts between businesses they are the norm.

A hidden defect that only becomes visible after two years does not automatically extend the period. Anyone who waits because remedial work "makes sense only in spring anyway" risks the claim becoming time-barred in the meantime.

What to do in the first few weeks

• Document immediately. This includes photographs with a date, from several distances and with a scale in the frame. The condition cannot be reconstructed later, because by then repairs, painting or further building work will have taken place.
• Give notice in writing. An oral complaint on site is legally effective but worthless in a dispute. The notice should describe the defect specifically, that is not "damp in the basement" alone but where, since when and to what extent it occurs.
• Set a remedial deadline. As a rule, a price reduction or termination of the contract (§ 932 Abs. 4 ABGB) and monetary compensation for having the defect remedied by a third party (§ 933a Abs. 2 ABGB) are available only if the contractor refuses to remedy the defect or fails to do so within a reasonable period.
• Review payments rather than stopping them altogether. Under the case law you may, as a rule, withhold the entire outstanding contract price until the defect is remedied, not merely the amount the repair would cost. The limit is the prohibition on abuse of rights. Where your interest in withholding payment is grossly disproportionate to the contractor's interest in receiving the contract price, the right of retention falls away and you are in default yourself. Where the work is divisible, only the remuneration for the defective part may be withheld. The retention amounts under ÖNORM B 2110 (Deckungsrücklass and Haftungsrücklass) are a separate matter; they apply only where the standard has been agreed.
• Consider preserving evidence. Where the condition is likely to change, an application for judicial preservation of evidence can be useful. It is comparatively inexpensive and secures an expert's findings before remedial work begins.

Who is liable and why the attribution is rarely clear

Contractors are liable for execution errors, planners for planning and supervision errors, and developers towards purchasers under the development agreement. Several parties frequently come into consideration, and the cause cannot be reliably attributed without an expert. Whether a claim can be enforced later therefore depends on early preservation of evidence.

A practical note

Take the notice seriously even where the relationship with the construction company is good. A factual written complaint does not rule out an amicable solution; it only secures your legal position should an agreement fail.