Hidden defects after completion of the work

What is the contractor liable for?

However, the fact that the contractor is not liable for defects arising in the future does not apply to so-called hidden defects. These are defects that existed at the time of completion of the reconstruction but were not obvious and could not be detected. They did not become apparent until some time had elapsed. The client must notify the other party of such defects without undue delay, but at the latest within five years of taking over the building.

Inaddition, it is also possible to negotiate a so-called guarantee, under which the contractor undertakes to remedy defects that occur for a certain period of time after completion at his own expense. This guarantee is particularly important for the customer when concluding a contract for construction work, where the lifetime of the construction is expected to be decades.

Even if the contractor hires other entities, so-called subcontractors, to complete the work, the customer does not enter into a contract with them. He is still in a contractual relationship with the contractor himself, with whom he signed the contract, and he is also liable for defects, even if they are caused by the subcontractor.

If the client wants to be sure that the work will be faultless, sometimes the contractor will agree that the client will pay the remaining 20-30% of the price after the work has been completed, so that 20% of the agreed price after the whole reconstruction has been carried out and 10% after one year from the completion of the work in case hidden defects are found. It is also advisable to include in the contract an obligation for the contractor to have sufficient insurance in case the client suffers damage during the renovation of the house or flat, as well as insurance to cover just the additional defects.

In most cases,the work contract will not allow for termination, but it can be unilaterally terminated by withdrawal. The conditions under which this is possible should be regulated by the contract itself; if this is not the case, the statutory grounds remain.

Such grounds are primarily so-called material breaches of contract, for example, failure to meet the deadline for completion of the work agreed in the contract. It is therefore a fundamental defect in performance. However, it is necessary to withdraw from the contract without undue delay.

Example from law practice

For example, Martin entered into a contract with a craftsman to carry out renovations to his cottage. He paid a deposit of CZK 50,000 and the craftsman was to start work within 10 days after the contract was concluded. However, when the craftsman did not start the work even after five weeks, Martin withdrew from the contract and demanded a full refund of the deposit paid. The craftsman had committed a material breach of the contract and therefore defective performance.

Reasons for the contractor’s withdrawal from the contract include, for example, failure to provide the necessary cooperation from the customer. It is therefore necessary to communicate with the craftsmen, to give them access to the apartment and to arrange other matters necessary for them to be able to do their work. The customer will then, of course, be able to withdraw from the contract if the work ends up being fundamentally defective.

Those who want to be sure that their apartment will also be properly cleaned after the renovation can agree in the contract that the craftsman will properly clean up everything and not leave a mess behind.

We prepared this article for the Lidové noviny series “Law & Housing”. See also other articles from the series:

1. What to watch out for when buying a property
2. How to get a mortgage
3. What to check before buying a property
4. Who pays the property transfer tax and how?
5. What should be included in the property purchase contract
6. The most common mistakes when drafting a proposal to the Land Registry
7. Buying a property from a developer
8. Keeping the purchase price when buying a property
9. The difference between a condominium and a freehold
10. What is an annuity?
11. How to properly gift a property
12. What is the purpose of an easement or servitude?
13. Making a will and settling an estate
14. What is a collation
15. What shouldn’t be missing in a lease agreement
16. When rent increases can be made
17. Termination of the lease
18. Agreement to end the tenancy
19. How to draw up a work contract with a tradesman
20. Hidden defects and cancellation of a work contract
21. When do you need planning permission to renovate a property?
22. Home Rules
23. What does serving on a condominium board entail?
24. Why not underestimate the bylaws in a condominium
25. Common areas in a block of flats
26. What is involved in refurbishing a block of flats
27. Can a condominium or housing association go into debt?
28. How to renovate a house or cottage
29. What to watch out for when dealing with a construction “company”?
30. Building a house on a “green field”
31. How to remove land from the agricultural fund