What are Latent Conditions?

Latent conditions are defects or issues that are not apparent at the time of construction but become apparent later on. They can arise in both new build and renovation projects and can be caused by a variety of factors, such as poor workmanship, inferior materials, or environmental hazards. Some of the most common types of latent conditions found in residential construction projects include:

  1. Structural issues: These can include problems with the foundation, walls, roof, or other structural elements of the home. Examples of structural issues include cracks in the walls or foundation, sagging roof beams, or uneven floors.
  2. Water damage: This can be caused by leaks in the roof, walls, or foundation, or by poor drainage. Water damage can lead to mould, mildew, or other types of damage.
  3. Environmental hazards: These can include asbestos, lead, or other hazardous materials that were used in the construction of the home. These hazards can pose health risks to occupants of the home and can be costly to remediate.
  4. Soil conditions: The soil on which a home is built can impact the stability and safety of the home. Issues with the soil can include poor drainage, unstable soil, or soil contamination.

Identifying latent conditions before and during construction is important in order to mitigate potential risks and costs. This can be done through various means, such as soil testing, structural assessments, and thorough inspections. It’s also important to ensure that the construction contract addresses the possibility of latent conditions and specifies how they will be addressed.

In the case of renovations, it’s important to note that older homes are often more likely to have latent conditions due to the age of the property and the materials used in its construction. As such, it’s important for homeowners to take extra precautions when renovating older homes and to be aware of the potential risks associated with older properties.

Overall, the discovery of latent conditions can be a challenging and costly process for homeowners, but being aware of the potential risks and taking proactive measures to identify and address them can help minimise the impact of these issues on the construction project.

Dealing with a Variation Claim for Latent Conditions

If a homeowner receives a variation claim for latent conditions during the construction process, it’s important to understand the process for dealing with the claim and protecting their legal rights. Here are some steps to take:

  1. Review the contract: The first step is to carefully review the construction contract and any relevant insurance policies to understand the scope of work and insurance coverage. It’s important to determine whether the latent condition was excluded from the scope of work and whether the builder has complied with any notification requirements.
  2. Seek legal advice: Homeowners should seek legal advice from a construction lawyer experienced in latent conditions. A lawyer can review the contract and insurance policies, provide guidance on the legal rights and obligations of the parties involved, and assist in negotiating a resolution with the builder.
  3. Obtain an expert report: In order to determine the extent and cost of the latent condition, it may be necessary to obtain an expert report from a qualified professional such as a geotechnical engineer or asbestos consultant. The expert report can help the homeowner understand the nature of the issue and evaluate the reasonableness of the variation claim.
  4. Negotiate a resolution: Depending on the circumstances, the homeowner may be able to negotiate a resolution with the builder that is acceptable to both parties. This could involve revising the scope of work, adjusting the contract price, or seeking additional insurance coverage.
  5. Consider legal action: If a resolution cannot be reached through negotiation, the homeowner may need to consider legal action to protect their rights. This could involve filing a claim under their insurance policy, seeking compensation from the builder or other parties involved in the construction project, or taking legal action to enforce their contractual rights.

In any case, it’s important for homeowners to act promptly and seek professional advice when dealing with a variation claim for latent conditions. Failing to take action could result in significant financial losses and legal liabilities. By working with experienced professionals and taking proactive measures to address latent conditions, homeowners can protect their interests and ensure a successful outcome for their construction project.


In conclusion, dealing with latent conditions during a construction project can be a complex and challenging process for homeowners. It’s important to understand the role of insurance in managing latent conditions, the legal rights and obligations of the parties involved, and the steps to take when dealing with a variation claim for latent conditions. By working with experienced professionals, obtaining expert advice, and taking proactive measures to protect their interests, homeowners can ensure a successful outcome for their construction project.

As a solicitor and construction lawyer with over 10 years of experience, I have advised homeowners, builders, and contractors on a wide range of legal issues related to construction projects, including latent conditions. If you have received a variation claim for latent conditions, it’s important to seek professional advice and take proactive measures to protect your interests.

If you’re a homeowner in NSW, Australia, and you’re dealing with a variation claim for latent conditions, don’t hesitate to contact me for legal assistance. Together, we can help you navigate the complex legal landscape of construction projects and ensure a successful outcome for your dream home.