How has the Ten-year Structural Warranty Affected the Construction Industry?

2018 it became compulsory for contractors, architects and other service providers in the housing construction sector to offer a ten-year structural warranty.

Rebecca Ramboer, managing director of Protect, a specialist insurer for architects and construction professionals, gives us her interpretation of the new law.

Who is affected by this law?

A business undertaking must offer the ten-year structural warranty if it meets the following three criteria:

  • the undertaking carries out construction work or delivers intellectual services in relation to that construction work;
  • buildings concerned are exclusively or mainly for habitation;
  • and the services of an architect are a legal requirement.

What does the insurance cover?

The insurance provides cover for a period of ten years after the works are accepted. It covers the construction party liabilities set out in Articles 1792 and 2270 of the Civil Code, and concerns construction defects or water-tightness issues which could affect the structural stability of the home. The policy must cover the contractors and their subcontractors.

Are there any exclusions from the law?

Besides the exclusions provided for in the Insurance Act of 4 April 2014, the Act of 31 May 2017 lists eight exclusions:

  • damaged caused by radioactivity
  • damage through physical injury caused by exposure to illegal products
  • aesthetic damage
  • immaterial damage
  • visible damage or damage known to the insured at the point of practical completion or ensuing directly from mistakes, defects or incompetence known by the latter at the point of practical completion
  • damage caused by non-accidental pollution
  • additional charges as the result of home alterations and/or improvements after an insurance loss
  • material and immaterial damage below € 2,500

How are housing construction businesses affected?

The policy covers a ten-year liability period for serious defects. The law requires that insurance-liable contractors and other service providers hand their insurance certificates to the client and the architect before commencing the work. It is the responsibility of the architect to demand to see the certificate should the circumstances arise. Work cannot begin, in principle, without a certificate.

The law penalises failures to meet the insurance obligation and penalises an architect who is derelict in his duty to check for a certificate.

Insurers are required to register every issue of an insurance certificate in the Professional Association of Insurers' database.

Inclusion in the legalised deed

“The ten-year structural warranty is transferred with the home on transfer of the property rights until the term of cover expires. The notary must search the register of insurance certificates and report the search in the legalised deed”, says Rebecca Ramboer in conclusion.

Text: KMO Insider / Protect