I already accepted the finished work and later found hidden defects — can I still hold the contractor liable?

Acceptance is a discharge with two doors left open

Article 1719 provides that Acceptance of the work by the employer relieves the contractor of liability for any defect in the work, unless: (1) The defect is hidden and the employer is not, by his special knowledge, expected to recognize the same; or (2) The employer expressly reserves his rights against the contractor by reason of the defect. The general rule is severe, and deliberately so: a contractor is entitled to close his books once the owner has taken the work as satisfactory. What survives acceptance is what the owner could not have seen, and what he said he was not accepting.

Hidden, judged against your own expertise

The first exception has two halves and the second half is the one people miss. It is not enough that the defect was concealed; the employer must also be someone who, by his special knowledge, was not expected to recognise it. An ordinary homeowner and a developer with an in-house engineering team are held to different standards on the same turnover. Waterproofing that fails in the first heavy rain, reinforcement that was never installed, work buried behind finishes and substituted materials are the classic hidden defects, precisely because no amount of walking through the property at turnover would have revealed them.

The reservation you should have made

The second exception is entirely within your control at the time. A punch list attached to the acceptance certificate, a note that acceptance and final payment are without prejudice to identified items, an email sent the same day listing what remains outstanding: each is an express reservation of rights by reason of the defect. It needs to be specific and it needs to be contemporaneous. A general statement that you reserve all rights, made months later, is not the reservation the article contemplates, and it is the easiest thing in the world to have done properly on the day.

What the surviving claim looks like

Where one of the exceptions applies, the ordinary remedies revive. Article 1715 lets you require the contractor to remove the defect or execute another work, and to have it done at his cost if he fails or refuses. Article 1727 makes him responsible for the work of persons he employed, so subcontracting is no answer. Article 1723 imposes liability on the engineer or architect, and on the contractor, where a structure collapses within fifteen years of completion for the causes it identifies. Document the defect and the date you discovered it before anything is repaired.

Cases citing this provision

These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.

• Mavest (USA) Inc., et al. vs. Sapaguita Garment Corporation, G.R. No. 127454, September 21, 2005 — read the decision on LawPhil →
• William Golangco Construction Corporation vs. Philippine Commercial International Bank, G.R. No. 142830, March 24, 2006 — read the decision on LawPhil →

Related provisions

• Civil Code, Article 1719 — Acceptance and Hidden Defects
• Civil Code, Article 1715 — Quality of the Work; Remedies for Defects
• Civil Code, Article 1723 — Liability of Engineer/Architect/Contractor for Collapse
• Civil Code, Article 1727 — Contractor's Responsibility for His Workers