if you guys cannot come to an agreement with the terms and conditions it can be aborted and you don't have to compensate unless these terms were agreed upon before the tenant paid the deposit.

having said that , defects can be very small or it can be very big..if its a serious defect like structural, leakage then ok they should be given an option to terminate

As to your question, if its a major defect, you have to go after the developer to rectify them but if its after the defect period, some developers will still rectify if its a very serious defect like roof collapse , water tank burst, major leakage that cause flooding of entire house, structural cracks in walls, etc..

If developer does not rectify, you will have to pay for the costs - nothing to do with your tenants.