When is a construction project actually “done”? Well, that’s a difficult question to answer. Once the general contractor and subcontractors leave the site, there are still statutes of limitations or statutes of repose that outline the time limits for the project owner to bring a claim. Conversely, there may be a point in which you can consider a project “completed” when the contractor is still performing work on the structure. This has to do with different ways to claim that a project has reached “completion.” We’ll look at one of those ways — “substantial completion” — in this blog.
Substantial Completion Defined
To paraphrase, the American Institute of Architects describes substantial completion as the stage in which a building or structure can be used for its intended purpose. Contractors and subcontractors could still perform minor or corrective work on a structure after the parties reach substantial completion. Construction contracts typically set the target date for substantial completion. If substantial completion isn’t reached by the target date, the contractor could ultimately be liable for damages.
When is Substantial Completion Usually Reached?
The optimal target date for substantial completion is unique to each project. Countless factors go into determining this date. Some construction professionals choose to tie in the certificate of occupancy when deciding on the target substantial completion date. Whatever you and the other parties decide, it’s important to be specific in the contract.
Why is the Substantial Completion Date so Important?
Contractors are usually entitled to receive the remainder of payments when they reach substantial completion. Substantial completion means that the clock begins ticking on bringing claims against the contractor’s work, warranties, or statutes of limitations. Put another way, substantial completion means the parties are working toward final completion. For contractors, this involves knocking out the items on their punch list.
Final completion involves one last inspection by the design team and engineering firm. If appropriate, the contractor or subcontractors may be requested to make final modifications to the structure. Retainage fees may be collected by contractors after final completion. Insurance obligations might shift to the building owner upon substantial or final completion. These questions should be answered in a thorough, well-negotiated contract.
A Law Firm for Construction Professionals
While legal matters and disputes that arise with construction projects are heavily affected by the underlying contracts, not every “contract lawyer” is prepared to handle these issues. It’s important to have the help of an experienced and knowledgeable construction attorney to set up your contracts and efficiently settle any disputes that may arise during the course of construction. Please contact Florida Construction Law Group today to see how our team can help you and your team.
