7. National Construction Authority (Defects Liability) Regulations, 2020

The Regulations sought to impose responsibility and liability on contractor and other professionals involved in a project in case of defects in the building within the Defects Liability Period.

Quick Link: http://kenyalaw.org/kl/fileadmin/pdfdownloads/LegalNotices/2020/LN64_2020.pdf

· The Regulations were published in April 2020 vide Legal Notice No. 64 of 2020

· The Regulations would ideally form part of the maintenance value chain as they sought to impose responsibility and liability on contractors and all the other professionals (such as engineers, architects) involved in a project in case of defects in the building within the Defects Liability Period. The Defects Liability Period commences upon issuance of a Certificate of Completion by the relevant county government. A patent defects liability period, where a patent defect is one that can be identified upon reasonable inspection during the construction period commences from issuance of certificate of completion for at least 12 months. A latent defects liability period, where a latent defect is a structural flaw that is hidden or not readily detectible during the defects liability period, is a minimum of 6 years following completion of the patents defects liability period.

· These defects liability periods set by the Regulations are at odds with standard form construction contracts in the industry in Kenya which leave the issue to contracting parties to agree. An example of a common standard form construction contract is the Agreement and Conditions of Contract for Building Works of 1999 (the ‘Joint Building Council’ (JBC) ‘1999’) published by the Joint Building Council of Kenya in 1999 (The Green Book). Accordingly, the Regulations would require a review of the standard construction contacts, sale agreements, leases and provision of warranties for purchasers. Buyers would be able to maintain a legal action against contractors and professionals involved, even following the exit of the seller/developer. The inclusion of professionals in the joint liability would also increase the costs of construction as they would have to take this risk into consideration and potentially seek to increase their professional indemnity cover in anticipation of such material risks.

· Notably however, the Regulations were only meant to cover commercial buildings, which are defined as premises occupied wholly or partially for trade, business or for rendering services for money or its worth. This means that residential buildings/houses, which form the domain of affordable housing, are not covered or included and thus not affected.

· Further, various stakeholders had raised concerns that they had not been consulted in the development of the Regulations. Accordingly, the stakeholders moved to court challenging the publication of the Regulations, and the Regulations were recently quashed in April 2022 by the High Court in Republic v National Construction Authority & 2 others; Joint Building and Construction Council (Exparte) (Judicial Review Application E1120 of 2020) [2022] KEHC 333 (KLR) for lack of consultation with the NCA Board and consideration of all submitted views and the fact that the Regulations were not tabled in parliament for approval as required by the Act. Accordingly, they are currently of no legal effect.

· There is need to foster the relationship between the NCA and the county governments to ensure a seamless process. Also need to harmonize the inspection process.

· There are capacity challenges on the part of NCA in terms of skilled workforce to ensure supervision and enforcement.