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Latent conditions are physical conditions on, underlying or adjacent to the site that could not be identified by reasonable observations or investigations of the site or the site information provided in the tender documentation at the time that the tender for the works was being prepared. Some contracts specifically state what a latent condition is.
If, as a result of the discovery of latent conditions on the site, the contractor suffers a loss, expense or delay, the contractor is entitled to make a claim. The claim may include reimbursment for the cost to overcome the latent condition and an adjustment of time (including time costs where applicable) for the period that progress of the works was delayed, or that the construction period was extended, while the latent condition was overcome.
Where not specifically included in the Conditions of Tender, latent conditions may include:
- unexpected subsoil conditions affecting the bearing capacity of the site
- rock at a depth not anticipated (higher or lower)
- rock harder or softer than anticipated
- isolated rock 'floaters'
- services or service locations not in accordance with the site information
- the capacity of existing services less than advised
- conditions within an existing building being renovated or altered found to be different to what could reasonably be expected.
Refer to ABIC contracts Section F.
In ABIC contracts, latent conditions do not include:
- valuable items
- dangerous or contaminated material.
Different contractual procedures apply if they are discovered. Some contracts may include time bars for the communication of discovery of latent conditions.
Determination of latent conditions
Architects may be required to assess claims made related to latent conditions while administering the construction contract. To process such a claim, it is important to first ensure whether the contract defines a latent condition and what the definition and contractual mechanisms are. Architects should also determine whether contractors have been asked (at the time of tender) to ensure they are aware of the site and its conditions – and to then make adequate allowances to achieve the contracted outcome. This may impact a principal’s willingness to agree with a latent conditions claim.
Disclaimer
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