Latent Conditions

A separate guide deals with unexpected site conditions generally. This guide focuses on latent conditions - physical conditions that could not reasonably have been discovered before the contract was signed.

What latent conditions are

Buried rock, old fill, contaminated soil, unexpected groundwater and similar conditions that were not reasonably apparent before signing.

Who usually bears the risk

Most residential contracts treat latent conditions as the owner’s risk. If the builder strikes them, they can claim additional time and money.

Definitions matter

The contractual definition of a latent condition, and what the builder is deemed to have allowed for, determines when a claim can be made.

Notice and valuation

The contract may require prompt notice and set out how additional cost and time are valued. Both parties should follow the process rather than rely on informal conversations.

Evidence before disturbance

Once a condition is excavated or covered, evidence can disappear. Photographs, survey information and engineering advice can be important.

Questions to ask before signing

How does the contract define latent conditions? Who bears the risk? What notice and evidence are required? How is additional cost and time valued?

The key lesson

Latent conditions are one of the most common ways a fixed price moves. Understand who carries that risk and what must be proved before you sign.

Before You Sign

This guide provides general educational information for South Australian homeowners. It is not personalised legal advice. The effect of any issue depends on the wording of your own contract, schedules, Special Conditions, plans, specifications and the facts of the project. A good builder and a well-understood contract should work together. Before committing to one of the largest financial transactions you may ever undertake, consider having the actual contract reviewed so you understand the obligations, notice requirements and consequences before they are tested on site.

Before You Build. One Signature. One Chance.