Most people in real estate don’t see defects management as a strategic discipline.
But here’s the truth::
If you don’t have a structured, auditable process for managing defects, you’re building risk into the project from day one.
And sooner or later, that risk turns into cost, delay or dispute.
The Hard Lesson I Learned Early
Years ago, as a junior QS, I was working on a project where my company acted as both QS and PM.
Like every good QS, I’d go to site each month, measure the works, mark up drawings, check progress, and go through the architect’s site report.
Then I’d issue my valuation recommendation:
“Provided the works have been completed in accordance with the contract, we recommend payment of….”
For the first six months? Fine.
A few defects. Nothing serious. But no structured tracking. No formal responsibility. No evidence of close-out.
We were relying on the contractor to keep their own log.
They didn’t.
And payments kept going out.
Fast forward 18 months and “minor issues” had become major failures. Whole sections of the work were condemned. The Contractor couldn’t afford to fix the issues, so declared insolvency.
The uncomfortable truth?
We didn’t have a proper Contract Administrator–led defects management process – the very thing the RICS says is essential.
What RICS Says About Defects Management (and Why It Matters)
RICS Guidance Note on Contract Administration makes it crystal clear:
- Defects must be formally identified, recorded and notified.
- The CA must monitor, manage, and verify rectification.
- There must be a clear evidence trail for every closed defect.
- Defects management is not optional – it’s a contract duty.
RICS also emphasises:
“Quality and progress must be validated prior to recommending payment.”
In other words:
If the defects process is weak, valuations become questionable, and once money leaves the door, leverage disappears.
What CIOB Best Practice Adds
The CIOB Code of Quality Management recommends:
1. A “Defects Mesh” Approach
Meaning defects should be identified across 3 layers:
- Design quality
- Workmanship quality
- Materials/product quality
Without a structured mesh, you miss things.
2. Early quality intervention
CIOB is clear: Don’t wait until practical completion to start snagging. Inspections early in the programme reduce rework dramatically.
3. Responsibility cannot sit with the contractor alone
CIOB emphasises that:
“Defects management must be owned by the client team and contract administrator.”
This distinction is where many projects go wrong.
Why Defects Management Fails (Across All Project Types)
Whether it’s CAT A for a landlord, a rolling refurbishment for an asset manager, or a new fit-out for a tenant, the same failure modes appear:
- Defects noted but not tracked
- No formalised register
- Reliance on contractor goodwill
- Inconsistent evidence
- No link to payment
- No structured close-out
- No clear criteria for Practical Completion
- No audit trail
This is the environment where quality drifts – quietly, then suddenly.
What Good Defects Management Looks Like
1. A Live, Auditable Defects Register
Fields must include:
- description
- location
- responsible subcontractor
- cause (design / materials / workmanship)
- date raised
- target completion
- evidence uploaded
- date formally closed
If it’s not in the register, it doesn’t exist.
2. Formal Notification and Instructions
Defects must be:
- notified in writing
- issued as instructions/orders
- tied back to contract clauses
- communicated to the correct party
3. Early Inspection of High-Risk Trades
Examples:
- fire stopping
- MEP installations
- waterproofing
- façade elements
- structural interventions
Early inspection = fewer disputes at the finish line.
4. Link to Payment and Practical Completion
RICS is very clear: Quality must be verified before certifying payment.
And Practical Completion should only be granted when:
- all major defects are resolved
- only minor, non-critical items remain
- there is no outstanding work that prevents beneficial use
This is where many CA decisions go wrong, and disputes begin.
5. Evidence-Based Close-Out
Close-out requires:
- photo evidence
- sign-off by the CA
- re-inspection where necessary
- proof the underlying cause was fixed, not just the symptom
“Cosmetic patching” is not rectification.
Why This Matters for Landlords, Developers, and Asset Managers
A consistent defects process directly protects:
- asset value
- maintenance liability
- service charge exposure
- tenant satisfaction
- plant performance
- warranty and guarantee rights
- programme certainty
- future letting prospects
One missed defect today can become:
- a leak in six months
- failed heating in winter
- a fire-stopping issue at audit
- a plant inefficiency costing thousands
- a dispute during dilapidations
Defects management isn’t just about the build. It’s about the life of the asset.
Final Thought
Small issues stay small only when you treat them like big issues.
Every project – office, industrial, retail, residential – benefits from disciplined defects management.
And after that early-career lesson?
I’ve never relied on a contractor saying “Don’t worry, we’ll sort it” ever again.
Need Some Help?
Need someone to look at your defects and valuation process? Send us an email at info@ethoseq.co.uk or drop us a DM.
General Disclaimer
This article is for general information only and is not intended to constitute professional advice. Every project and contract is different, and specific advice should always be sought before acting on any of the points raised. While every effort has been made to ensure accuracy, no responsibility is accepted for any loss resulting from reliance on this content.
Intellectual Property Statement
© EthosEQ. All rights reserved. This publication and its contents are the intellectual property of EthosEQ and may not be reproduced, distributed, or used commercially without prior written consent. Short excerpts may be shared for non-commercial purposes provided the source is clearly acknowledged.
References
RICS – Contract Administration (Guidance Note)
A key reference for roles, duties, and defects management procedures.
https://www.rics.org/profession-standards/rics-standards-and-guidance/contract-administration-1st-edition
RICS – Quality Management in Construction
Focused on ensuring consistent quality, recording issues, and closing out defects.
https://www.rics.org/profession-standards/rics-standards-and-guidance/quality-management
CIOB – Code of Quality Management
The CIOB’s formal quality framework for managing workmanship, materials, and defects.
https://ciob.org/resources/quality/code-of-quality-management
CIOB – Defects, Quality and Compliance Resources
General hub including best practice documents and guidance.
https://ciob.org/resources/quality
CIOB – Construction Quality Commission Reports
Insight into causes of defects and recommended early-intervention strategies.
https://ciob.org/resources/research/construction-quality-commission
