Cladding and defective construction products

Backgound

A tragic fire took place in Spain on 22 February, in a residential building located in the Campanar district of Valencia, resulting in ten fatalities and total loss of the building. This may now become the first cladding dispute in Spain.

The issue of unsafe construction products has been raised once again, as the ongoing investigations attribute the rapid spread of the fire to the polyurethane cladding installed on the façade, together with other circumstances yet to be determined. Inevitably, this incident recalls the Grenfell Tower loss in London in 2017, with the subsequent remediation works to similar buildings, and wholesale re-evaluation of cladding requirements and regulations in the UK.

Building safety law in Spain

In Spain, the main regulations applicable to residential buildings are defined by the Building Act (Ley de Ordenación de la Edificación, in force since May 2000) and by the Building Technical Code (Codigo Tecnico de la Edificación, or CTE, in force since March 2006). Both provide specific requirements on the safety conditions for residential buildings regarding fire risks. However it seems that the Campanar building did not fall within the scope of the CTE's strict provisions, because the building licence was requested before the CTE was in force. Consequently, it is possible that the use of the polyurethane cladding which was installed on the façade of this specific building did not breach any applicable regulation at that time.

However, the question now being asked is how many buildings in Spain may suffer from similar unsafe conditions to those in the Campanar building; the need to amend the applicable regulations is already under discussion.  

Construction products

In relation to liability for defective or inadequate products in construction, a relevant judgment was handed down by the Spanish Supreme Court on 14 November 2023.

In this specific case, a Community of Owners was claiming damages from the architects and builder for defective design and defective materials used for the façade cladding.

The Court observed that, as a general rule, the surveyor or director of the execution of works ("director de ejecución") is the agent in charge of the control of the materials. However, if, despite complying with the quality specifications, the products are found defective, the surveyor would not be liable, but the liability would be attributable to the builder and to the supplier of the defective products. Should damage be caused to the building, the liability would be on the builder even though the ultimate liability lies with the supplier. However, if the defect on the materials should have been noticed by the surveyor, he would be found exclusively liable, as he is supposed to be the expert in construction materials.

According to the Supreme Court, a construction product can be defective in two different respects, entailing different scopes of liability:

i. Because it is objectively unsuitable and does not comply with the technical requirements. In this case, the supplier of the defective product would be liable. However, this liability may extend to the builder or to the surveyor/director of execution, if both should have known that the product was objectively unsuitable, or if they should have performed tests or trials on said product; or

ii. because, although suitable, it is not fit for the particular use or installation on a particular construction site. If the product, although objectively suitable and complying with the applicable requirements, is not suitable for its use, the responsibility lies with the agent who decided to use it (designer, architect, surveyor, or builder).

As decided by the Spanish Supreme Court, the defect in question was not a wear and tear problem, nor a workmanship defect, but a problem with the decision on the materials to be used when the building was designed.

Therefore, according to the Supreme Court criteria, liability for the use of this defective product should be attributable to the designer architect, together with the surveyor and builder, as it was caused not only by a faulty design provision, but also by a lack of control over the execution of works.

In terms of limitation, the Building Contract Act states that any claims against the construction agents are excluded from the construction guarantee after ten years from the date of final completion. Furthermore, there is an additional limitation period of two years from the day on which damages arise. But even if the claim under the Building Contract Act might be time barred, the victim can still bring claim on a purely contractual basis or in tort.

For the specific case of the Campanar loss, criminal enquiries are being conducted, and news on the building process and circumstances are expected to be clarified in the next weeks.

Finally, the Spanish Building Act includes the following considerations on the potential liabilities for the suppliers of construction products:

i. Manufacturers, sellers, or distributors of construction products are to be considered product suppliers.

ii. A "product" in construction is considered to be one that it is manufactured for permanent integration in the building including materials, semi-finished elements, components and works or part thereof, both finished and in process of execution.

iii. The products supplier must: (a) deliver products according to the specifications of the order, identifying their origin, identity and quality, according to the applicable regulations; and (b) provide, where appropriate, instructions for use and maintenance, and quality guarantees.

What to expect?

In this context, it is reasonable to expect that this recent tragic fire, the first loss due to defective cladding in Spain, may entail remediation works on many buildings in a similar condition throughout Spain, and clarification or even amendment of fire safety regulations, both alongside proceedings to determine the liabilities on this specific loss.

Information and resources prepared by our experienced cladding and building safety team can be found on our Cladding know how pages.