The average construction project is a significant endeavor. Timelines are critical to staying on time and under the desired budget. New construction homes and infrastructure projects are soaring in the United States.
One of the best tools for contractors to use when monitoring progress is the completion of work. The completion of work is the stage of construction where the structure is complete, minus minor issues and defects. Learning the basics will help you progress with construction project management for your next build.
Fortunately, you’re a step ahead of your competitors. You’ve found this handy guide to learning about the completion of work for upcoming projects. Continue reading to learn your contractor liabilities today!
What Does Substantial Completion Mean?
Substantial completion is the point in the building process where the contractor hands the project to the client. It’s a statement that all work outlined in the contract has been completed.
At this point, projects are nearing the finish line. Minor blemishes and issues remain, but most of the project’s tasks are completed and ready for the following stages.
When the structure is substantially completed, the owner can safely enter and inhabit it. Typical outstanding items include incomplete design aspects and minor defects.
Importance of Completion of Work
Now that you understand what completion of work covers, it’s critical to learn how it affects your project and brand. It’s an essential step for both the client and the contractor. Here’s a deeper look at how it affects your finances and project.
Release of Cash
The client has retention money that you’re owed after completing the project. When you earn the certificate of substantial completion, the client must pay you the money you’re owed.
The retention cash is the money held back until you’ve completed the project as outlined in the contract. You can use the percentage of completion to monitor your progress.
Ending Contractor Liabilities
You’re off the hook for liabilities when you hand the project to the client after substantial completion. At this point, you can rest easy about liquidated damages.
The standard cause of these liabilities is contractors falling behind deadlines. Use construction project management principles to keep your project on schedule.
Beginning of Defects Liability Period
The length of the defects liability period depends on the contract between you and the client. The typical period lasts between six months and two years.
It ensures your brand can access the property and make necessary changes or repairs. You risk your client working with a third-party contractor. They will add the finishing touches to your project without the defects liability period covered in the contract.
Apply Completion of Work to Your Next Project
Understanding the basics of completion of work and substantial completion will help you deliver a completed project before the deadline. You can hand the project to the client with peace of mind and reduced contractor liabilities.
You’ll receive the retention cash for your construction project. The completion of work also ends your liabilities for the project’s progress.
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