Every commercial fit-out comes with warranty and defects cover — but the specific periods, scope and exclusions are poorly understood by most tenants until something fails. This guide explains JCT defects liability, 10-year structural warranties, M&E and component warranties, and latent defects insurance — who covers what and for how long.
Commercial fit-out post-completion cover operates in three overlapping layers:
Usually 12 months from practical completion. The contractor returns to remedy defects arising from faulty workmanship or materials.
Manufacturer warranties on M&E, fittings, flooring, carpet, lighting. Typically 1–15 years depending on component.
10-year structural warranty (where applicable) plus collateral warranties to the tenant, landlord and funder.
Latent defects insurance — a fourth layer — covers major defects appearing years after completion. Usually sits with the landlord, not the tenant.
Standard JCT Design and Build 2016 contracts (the default for London commercial fit-out) include a Rectification Period of 12 months from practical completion. During this period:
The 12-month period isn't statutory — it's contractual. Some clients negotiate 24 months on premium fit-outs; the retention structure shifts accordingly.
The Rectification Period excludes:
| Component | Typical warranty | Typical failure mode |
|---|---|---|
| Carpet tile | 5–15 years | Pile crushing, seam lifting |
| LVT flooring | 15 years (commercial) | Surface wear, edge curling |
| LED lighting | 5 years | Driver failure, colour shift |
| VRF units | 2–5 years | Refrigerant leaks, control board |
| Partitioning systems | 2–10 years | Seal degradation, hinge failure |
| Kitchens (Miele etc) | 2–5 years | Compressor, electronic controls |
| Quooker/Zip hot taps | 2 years | Thermostat, filter housing |
| Cubicle systems | 5 years | Hinge wear, panel warping |
Product warranties are typically passed through from manufacturer to client via the contractor at handover. The contractor cannot warrant third-party products beyond the manufacturer's cover.
Where a fit-out involves structural alterations — floor openings, internal staircases, mezzanine, structural reinforcements — a 10-year structural warranty applies. Provided typically by:
Cover: structural failure, water ingress through structural elements, major subsidence/movement. Premium: typically 0.5–1.5% of structural works value.
Landlords routinely require collateral warranties from the tenant's contractor to protect themselves against contractor failure. Standard JCT collateral warranty forms (CWa/P&T, CWa/F) are the market template.
The collateral warranty gives the landlord (or funder) the right to sue the contractor directly for defects — bypassing the tenant if the tenant has disappeared (e.g. insolvency). Typical requirement on leases where the landlord is contributing to CAT B fit-out.
Standard JCT fit-out retention: 5% of the contract sum, released in two tranches:
50% of retention (2.5% of contract sum) paid on PC certificate issue.
Remaining 2.5% paid on issue of Final Certificate of Making Good Defects — typically 12 months after PC.
Retention can be negotiated to 3% or to be released via retention bond (tenant pays premium to insurer in lieu of holding retention). Common on larger fit-outs.
Latent defects insurance (LDI) covers defects that don't emerge until after the contractor defects period has ended — typically 5–15 years post-completion. Standard on new-build and major refurbishment; less common on pure fit-out.
Cover typically includes:
Premium: typically 1.0–2.5% of construction value. Usually procured by landlord for building-level works; tenant-level LDI is unusual on fit-out.
Email to contractor with description, location, photograph. Date-stamp the notification. Start the clock on the 10-working-day response.
Contractor surveys within 5 working days, agrees scope with client.
Works typically completed within 10 working days. Where parts require ordering, notify revised timeline.
Client signs off remedy as complete. Adds to defects log.
Every fit-out should maintain a defects log through the 12-month period. A good defects log tracks:
At defects period end, the contractor issues a Certificate of Making Good Defects. The log is the supporting evidence.
Contractor argues damage is tenant misuse; tenant argues faulty workmanship. Photo evidence at PC and immediately on defect appearance resolves most disputes.
Contractor slow to attend. Escalate via contract admin. Document each notification — repeated delay can justify employing third party and deducting from retention.
Tenant asks for upgrade or change under defects cover. Contractor declines. Separate variation quote.
Tenant withholds retention beyond defects period end despite no open defects. Contract specifies release mechanism — follow it.
Standard fit-out contracts include 12-month Rectification Period with defects log maintenance and response within 5 working days. Product and M&E warranties passed through at handover in the O&M pack. See Office Fit-Out, Office Refurbishment, Office Renovation.
No. The defects period (12 months) is a contractual obligation on the contractor. Warranties (product-level or structural) run longer and are typically insurance-backed or manufacturer-direct.
Retention is held by the client for this reason. Collateral warranties and product-level manufacturer warranties survive contractor insolvency. For structural works, the 10-year warranty is the insurance-backed safety net.
Yes — negotiable at contract stage. Common on premium fit-outs to agree 24 months. Retention and pricing adjust accordingly.
The tenant (or client under the contract). Contractor issues at PC. Required under CDM 2015 for the H&S file — must be preserved for the life of the building.
Contractor-defect remedies are free to the tenant. Tenant-caused damage or consumables are chargeable. Early in the period, contractors rarely argue borderline cases; towards the end they often do.
Measured survey and fixed-price quote within 10 working days.