The Defects Certificate Explained

The NEC Defects Certificate is explained best as a list, not as a sign-off: it either names the notified Defects the Contractor hasn't corrected, or states that there are none. The Supervisor issues it at the end of the defects process, and it triggers the final assessment of what is due.

The clause is 44.3 in the NEC4 ECC and 43.3 in NEC3. See also the short definition of the Defects Certificate and our overview of quality and Defects under NEC.

When it is issued

So NEC4 allows a certificate before the last period has expired, if everything has already been corrected. Check the wording in your own ECC, particularly if it has been amended. Either way, a Supervisor doesn't need the Client's permission: the certificate follows from the facts.

What it triggers

• Final assessment. Under NEC4 clause 53, the Project Manager has four weeks from the certificate to assess the final amount due. See the final assessment guide.
• Retention. If Option X16 is used, none is held after the certificate.
• Insurance. The cover required by the Insurance Table runs until the certificate, or a termination certificate, is issued.
• Low performance damages. If Option X17 applies, a Defect on the certificate that shows performance below a stated level leads to these damages.
• Capped design liability. Under Option X18, there can be a cap on Defects due to the Contractor's design that are not listed on the certificate.
• Parts taken over. Some exceptions to the Client's liability for taken-over parts run only until the certificate, as the Client's liabilities guide explains.

What it does not do

The clause preserves the Client's rights over any Defect the Supervisor hasn't found or notified. This is the single most misunderstood point:

• It isn't a statement that the works are free of Defects.
• It doesn't release the Contractor from liability for latent problems.
• It isn't an acceptance of any Defect listed on it.

If a roof leaks two years after the certificate because of poor workmanship nobody spotted, the Client may still have a claim for breach of contract. It would be pursued under the general law, within the limitation period, and that period depends partly on whether the contract was executed as a deed. Take legal advice on any specific case.

Defects listed on the certificate

A Defect listed there has been notified and not corrected. Under the wider rules, the Project Manager would normally assess the cost of those Defects as uncorrected Defects. That sum then feeds the final assessment, so listing them accurately has a direct money effect.

An example certificate, in outline

Before you issue it: a Supervisor's checklist

1. Reconcile the register against every notification made by either side.
2. Confirm how each item was closed: corrected, accepted by quotation, or treated as accepted after an assessment.
3. Confirm that the last defect correction period has been worked out using the right start date.
4. List outstanding Defects precisely, by reference.
5. Issue it to the right parties under the contract, in the required form.

Common mistakes

• Holding it back for a new problem found after the defects date. A Defect found later doesn't reopen the notify-and-correct process, and shouldn't be a reason to delay.
• Using it as a bargaining chip over the final account. Its timing comes from the contract and not from a commercial negotiation.
• Issuing it with no list and no statement. It has to do one or the other. A certificate that says "all works acceptable" adds confusion.

Related guides

• Quality and Defects Under NEC
• Keeping a Defects Register
• Quality Management Under NEC4
• Contractor's Design
• Accepting a Defect
• Defects Date Explained

This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.