Defects liability period (DLP)

The defects liability period is the window after practical completion (typically 12 months) during which the contractor must return and rectify defects, and during which the final portion of retention is usually held.

Two pieces of drafting decide whether a DLP is ordinary or punishing. First, whose completion starts it: your trade's completion, or the head contract's, which can be months later. Second, whether rectifying a defect RESTARTS the period for that work. Restart drafting can extend the tail, and the retention held against it, well beyond the period you priced.

Why it matters to subbies

Your retention waits on the DLP's end. A 12-month period tied to head-contract completion with restart drafting can hold your money for two years or more. Price it, or negotiate a fixed outside date.

General information for Australian subcontractors, not legal advice. Contract drafting and state legislation vary and change; your document and your state's Act govern. Written by Mat Kennedy at The Construction Contracts Co.