When Does the Clock Start? Latent Defects and the Limitation Problem
A building develops cracks. Not the hairline settlement cracks every new building shows in its first year — the kind that spread. The structural engineer's report identifies a defect in the design. The building is eight years old. The question that decides whether there is a claim at all is not who is at fault, or even how much it will cost to fix. It is: when did the clock start?
The Problem
In negligence, a claimant has six years from the date the cause of action accrues. For a latent defect — one hidden until it manifests — the traditional view has been that the cause of action accrues when physical damage occurs, not when it is discovered. If a defect causes damage in year two but the damage is invisible until year eight, the claim may already be time-barred when the owner first learns of it.
This year's Hudson Prize-winning paper at the Society of Construction Law, "It's Always the First Place You Look: Finding Harm and Completing the Cause of Action in Negligence for a Defective Building" by Kevin Touhey, examines exactly this problem across multiple jurisdictions. The paper compares three competing tests for when a cause of action accrues: physical damage, discoverability, and acquisition. The answer matters enormously — under one test the claim lives, under another it dies.
Why It Matters to Developers and Funders
If you are a developer, the limitation clock may have started before you owned the building. If you are a funder holding security over a scheme with a latent defect, the borrower's claim against the design team may expire while the facility is still live. The commercial consequences are real:
- Security valuations — a time-barred claim is worth nothing in a recovery scenario
- PI insurance tracing — if the claim is time-barred, the availability of run-off cover becomes academic
- Portfolio risk — for funders holding multiple schemes from the same developer or design team, a single limitation principle failure can crystallise across the portfolio simultaneously
The Building Safety Act Complication
The Building Safety Act 2022 introduced the Remediation Contribution Order regime and extended certain limitation periods for building safety defects. But the interface between the BSA's extended periods and the common law negligence position is not yet fully mapped. The SCL's Spring 2026 Journal also carried a paper on the "just and equitable" requirement for Remediation Contribution Orders — a test whose breadth is still being tested in the tribunal. For schemes caught by the BSA regime, the limitation analysis runs on two tracks simultaneously, and they do not always arrive at the same destination.
What to Do
Three practical steps:
- Schedule a defects review before year six. If a latent defect claim exists, you need to know before the six-year period expires, not after. A targeted structural survey at year five costs a fraction of a time-barred claim.
- Document the date of knowledge. If you argue the clock should start at discovery rather than damage, the paper trail from the first inspection is the evidence.
- Check whether the BSA extends your window. For residential buildings over 18m (or 11m under the updated gateway threshold), the BSA's extended limitation periods may apply — but the test for which defects qualify is still evolving.
The Bottom Line
Limitation is not a technicality — it is the claim. A perfectly pleaded case with overwhelming evidence is worth nothing if the clock ran out before anyone looked. The time to check is now, not when the cracks appear.
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