Typical Amendments To A JCT – Landlord & Tenant – Leases

The Joint Contracts Tribunal (JCT) publishes standard forms of
building contracts that are used for construction projects in
England and Wales. Whilst these standard form contracts do contain
a number of important provisions and are generally considered to be
drafted in a reasonably balanced way, there are a number of areas
which can be and often are updated to provide enhanced protections
or improve your position. In addition, the contracts are drafted
generally and therefore will most likely not address the quirks and
nuances of a unique project sufficiently. Therefore, while the
standard form contracts can be a good starting point for most
projects, some form of amendment to them is often required.

For the purposes of this article, we will focus on an unamended
JCT Design and Build Contract 2016 (“JCT DB
2016“), which is designed for projects where the
contractor carries out both the design and the construction work.
However, many of the other JCTs may also require similar amendments
to the ones we discuss below.

1. Updating insurance clauses

On many projects, the default insurance provisions will not be
sufficient or reflective of the way the project will be insured.
Particularly on projects such as fit outs, it is important that
careful consideration is given to the way the project will be
insured and that the contract reflects this. For further
information on this, please click here.

2. Single point design responsibility

Clients will often amend the standard form contract so that the
contractor takes the responsibility for all the design, including
any design in the Employer’s Requirements, as this is not the
case in the unamended JCT DB 2016. This is usually an expectation
of funders, tenants and other interested parties, and most design
and build contractors within the industry generally expect and
accept the amendment. Where, for example, the parties contract on
the unamended form of the JCT DB 2016, contractors will, in certain
circumstances, still be responsible for the Employer’s
Requirements meeting statutory requirements.

3. Copyright not being subject to charges

Under the unamended JCT DB 2016, the copyright licence is
conditional upon there being no monies owed to the contractor.
Employers often amend this to mitigate the potential withdrawal of
the copyright license in the event of a payment dispute.

4. Building Safety Act (“BSA”) amends

As discussed in our previous article here, the most recent changes came into force
on 1 October 2023, which implemented several new sets of
regulations. Whilst we are expecting the new suite of JCTs coming
out later this year to deal with these points, in the meantime it
is important that the contract deals effectively and properly with
the practical side of the new duties imposed on the various
individuals involved, in particular where the building in question
is a high-risk building (i.e. at least 18 metres tall or has at
least 7 storeys; and contains at least 2 residential units).

The schedule of amendments should also include and or make
reference to the general and, if applicable, additional duties for
dutyholders, as well as the new competency requirements.

Limitation period

Prior to the BSA, the limitation period was six years (or 12
years if the contract was executed as a deed), and such amendments
may startle contractors and designers alike, who previously would
have been able to rely on such time barred defence in the case of
any historic work.

However, the limitation period in relation to certain claims is
now 15 years instead of the previous six. This change applies
prospectively, meaning that it will apply in respect of buildings
completed after 28 June 2022.

Further, the limitation period for any retrospective claims,
being those involving developments that were completed before 28
June 2022, has been extended to allow up to 30 years after the
completion of the dwelling to bring an action save for the
exception that where that 30-year period would expire within the
first year of the commencement of the Act in which case the claim
must be brought within that year. It is best to then reflect these
new limitation periods within the contract.

Where applicable, the parties should agree and prescribe who
will be responsible for the passing of the gateway and the golden
thread of information and who bears the risk of any delays in
respect of these areas.

5. Third party provisions

Third party agreements are agreements which either of the
parties have entered into with other parties and are relevant to
the project, such as funding agreements, agreements with planning
authorities / other planning obligations. It is essential that the
JCT is amended to ensure that the relevant party complies with all
of its obligations under this third-party agreement and any breach
does not affect the other party to the building contract.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.