Liability for Defects in Waterproofing of Buildings – Practice in Croatia
Defects in waterproofing are among the most common problems encountered in newly constructed and renovated buildings. Water penetration through terraces, balconies and flat roofs, dampness in basements and walls, as well as the occurrence of mould and fungi, are not merely technical issues. Depending on their cause and consequences, they may give rise to several different liability regimes under the Croatian Civil Obligations Act (hereinafter: the “ZOO”).
First and foremost, a distinction must be made between the liability of the seller of real property for material defects and the liability of the contractor, designer and supervising engineer for defects in the building. If a buyer purchases an apartment or a house in which the cause of water penetration existed at the time the risk passed to the buyer, the seller may be liable for a material defect pursuant to Article 400 et seq. of the ZOO. 400. This also applies where the consequences become apparent only at a later stage, for example after the first periods of heavier rainfall.
In the case of latent defects, the applicable time limits are particularly important. 404. Pursuant to Article 404 of the ZOO, the buyer must notify the seller of a latent defect within two months of discovering it, while, as a general rule, the defect must become apparent within two years of delivery of the item. If the seller knew or ought to have known of the defect, the seller’s legal position is considerably less favourable because, pursuant to Article 407 407. of the ZOO, the seller cannot simply rely on the failure to comply with certain time limits for inspection and notification. Depending on the circumstances, the remedies available to the buyer include rectification of the defect, replacement, reduction of the purchase price, termination of the contract and compensation for damage.
A second liability regime relates to the building itself. Article 632 of the ZOO provides that the rights of the client against the contractor in respect of defects in the building also pass to subsequent acquirers of the building or a part thereof. This is particularly important for the purchaser of an apartment who was not a party to the construction contract. However, the transfer of ownership does not cause the applicable time limits to commence anew.
Of particular importance is Article 633. 633 of the ZOO. Pursuant to this provision, the contractor is liable, for a period of ten years from the handover and acceptance of the works, for defects in the building relating to compliance with the essential requirements for buildings prescribed by law. The designer is also liable for defects originating from the design, while the supervising engineer is liable for defects resulting from irregularities in the performance of supervision. Such liability also exists vis-à-vis a subsequent acquirer of the building and cannot be excluded or limited by contract.
This is precisely where the answer lies to the frequently asked question as to whether there is a “10-year warranty on waterproofing”, which is becoming an increasingly significant problem in newly constructed buildings. The ten-year liability regime applies only where the nature and extent of the waterproofing defect are such that, as a result thereof, the building fails to comply with an essential requirement prescribed by law.
The Building Act currently in force specifies, among the essential requirements, mechanical resistance and stability, safety in the event of fire, protection of hygiene and health, safety and accessibility, protection against noise, energy efficiency and the sustainable use of natural resources. With regard to waterproofing, the requirement concerning protection against harmful effects on hygiene and health is particularly important. In this respect, the Act expressly recognises the penetration of moisture into the interior of a building as a legally relevant occurrence.
Therefore, defective waterproofing of a terrace, balcony, flat roof, basement or foundation may fall within the scope of Article 633. 633 of the ZOO where it causes continuous or recurring water penetration, permanent dampening of the structure and internal surfaces, the occurrence of mould and fungi, or other consequences that jeopardise the normal and health-safe use of the premises.
With regard to the ten-year liability period, particular attention must be paid to Article 634. 634 of the ZOO. The ten-year period is not a period during which the owner may simply delay taking action. The defect must become apparent within ten years from the handover and acceptance of the works, the responsible person must be notified within six months of the defect being established, and, as a general rule, the rights against the contractor or the designer expire one year after such notification.
In disputes concerning waterproofing, the taking and presentation of evidence is of crucial importance. A construction expert examination should establish the source of the water, the manner in which it penetrates the building, the technical cause, the time at which the defect arose, and its connection with the design, execution of the works or supervision.
If remediation requires the removal of tiles, roofing layers or other parts of the structure, serious consideration should be given to securing evidence before the works commence. Remediation often results in the removal of precisely the most important physical evidence, namely the manner in which the original waterproofing was installed.
