Standards for Applying Defect Liability Period in Construction Work Become Clearer

Administrative Notice of the 'Guidelines for Managing Defect Liability in Construction Work' Draft Starting from the 27th

[Asia Economy Reporter Kangwook Cho] The Ministry of Land, Infrastructure and Transport announced on the 26th that it will issue an administrative notice for the “Draft Operation Guidelines on Warranty Liability for Defects in Construction Works,” which includes detailed standards, application cases, and precedents to clarify the scope and calculation criteria of defects, which frequently cause disputes between clients and construction contractors.

Although the Framework Act on the Construction Industry stipulates warranty liability according to the “object by type of construction work,” there was confusion due to the lack of specific standards, such as applying the warranty liability period solely based on the “type of construction work.”

Furthermore, in cases where construction involves a combination of two or more types of work and the defect liability can be distinguished, the warranty liability period should be set separately for each detailed type of construction work. However, there have been cases where the warranty liability was unreasonably extended by applying the main construction work period.

In the case of subcontracting, issues were raised where the start date for the warranty liability period was calculated from the completion date of the main contract work rather than the completion date of the subcontract work, unfairly transferring responsibility to subcontractors.

Accordingly, to resolve problems where clients or primary contractors excessively demand warranty periods through their superior position or transfer responsibility to subcontractors, the “Operation Guidelines on Warranty Liability for Defects in Construction Works” were prepared through activities of a public-private joint task force.

The guidelines define warranty liability as responsibility for defects caused by construction errors. “Construction defects” are clearly defined as cases where facilities are constructed inconsistently with design documents or where cracks, damage, leaks, or functional impairments occur after construction.

To strengthen the responsibility of construction contractors, it was clarified that defects occurring within the warranty liability period must be repaired even after the warranty period expires. For subcontracting, to prevent unfair transfer of responsibility to subcontractors, the warranty liability period is calculated limited to the subcontract work rather than the entire project.

In construction projects involving a combination of two or more types of work where warranty liability can be distinguished, the responsibility period is specified to be applied separately for each detailed type of construction work. For river construction projects, which involve various combined works and do not specify the type of construction in the law, detailed application standards by work type were prepared to apply the law appropriately according to purpose and function.

To prevent unnecessary defect disputes in advance, the guidelines introduce criteria for determining defects in construction works caused by natural disasters or poor maintenance, along with application cases. Additionally, to prevent unfair practices where contractors unreasonably transfer defect responsibility to subcontractors, prohibited unfair acts and exemption reasons for warranty liability are specified.

Kim Geun-oh, Director of the Construction Policy Division at the Ministry of Land, Infrastructure and Transport, said, “We will continue to discover and promote regulatory innovations to eliminate unnecessary dispute factors occurring at construction sites and to establish a sound construction market.”

This content was produced with the assistance of AI translation services.