Defects Liability Period

We have contractual obligations (including maintenance of equipment), statutory warranties and Hutchies’ reputation to consider when addressing any issues during the Defects Liability Period (DLP).

With the original Project Team typically on their next project, the response time to close out anything that comes up is under pressure.

During the typical 12 months DLP after Practical Completion there will be access restrictions in the building and multiple defects lists generated by the end users and client, despite our preference/insistence for ‘one list generated once’.

This is an opportunity to ensure everything is working well in the early stages of the building life – to tune the systems as necessary so they are working exactly as intended.

We want to build a relationship with the owners – individuals, building managers and body corporates so they can give us feedback as early as possible, and we can sort anything that needs attention quickly.

The way we address issues in this phase will determine the approach taken by many people.

It’s a sensitive period that is only successful when we are genuine and take care of issues.

Hutchies expects our people to consider the outcome of all actions (including doing works or pushing back) against a few very simple questions:
• Were we contracted to do it? (don’t give away our reasonable position)
• Is it something we are responsible for or should have done better?
• Is it the fair and right thing to do?
• Have the people involved had a trend of genuine issues?
• What happens if it’s not addressed?

You need to work out where this issue ends up at the start and jump to that position on Day 1. Don’t go through the dispute and create the unnecessary conflict and frustration only to end up in the same place. Wrap it up early and avoid the dispute completely. If you aren’t sure - ask for help!

If there is still an issue after you have done all that you can, call in support to review / assist. The earlier the better. These situations don’t go away by themselves, they escalate and create a worse position for you and Hutchies.

This leads very quickly to regulator action that may threaten our reputation and/or building license. Failure to address statutory defects poses a risk of directions or orders being put against our name on the public record, and demerit points against our building license (which is a threat against Hutchies’ entire business).

Where action is taken by others, the Hutchies resources required to deal with an issue to ensure actions and responses are completed properly and in a timely manner is significant. This reduces our capability to deal with other live projects and moving forward.

It may delay the release of retention bank guarantees/securities.

If action is taken against Hutchies it essentially says we needed to be told what to do by the regulators or lawyers for Body Corporates who have engaged experts to argue the case.

Hutchies just doesn’t operate like that - it goes against our values and culture.
Scott’s take on defects includes:

It’s important to manage the works in this phase well to manage our ongoing contract, financial, regulatory action and reputational exposure.

Its critical to manage the risk to Hutchies -which requires you to hold the subbies accountable, maintain a good reputation by doing the right think in a timely manner and learn more about building performance (what works and what doesn’t) so we continually improve.