After months of blood sweat and tears, your building has taken shape and is ready to hand over to its new owner. This is a key milestone in any construction project, and it is time to issue a practical completion certificate. This shows that bar some minor defects, the building is ready to occupy.
Despite being such an important moment in a project, practical completion is in fact something of a ‘grey area’. There are no fixed legal definitions of what it means and it normally requires the judgement of all parties to agree this state has been achieved.
On most projects, practical completion is a largely manual process involving site visits and sending around printed documents. However, with smart use of technology, the process becomes much more efficient.
Let’s explore what it involves, then see how the process could be made much more efficient using digital technology.
What happens at practical completion?
Practical completion is the moment in a building project where all stakeholders agree that the structure is complete bar a few minor defects that can be put right during the defect liability period. It is often considered to be the point that the building is ready to be occupied.
On the completion date, a certificate of practical completion is issued, and this triggers a number of important legal and commercial events. Here is what happens at practical completion:
- The customer must pay the contractor any retained funds
- The defect liability period begins (typically 12 months after completion where the contractor must remedy any defects)
- Responsibility for loss or damage on the project transfers from the builder to the owner
- The requirement to insure the project passes from the builder to the owner
- The contractor no longer needs to complete any major changes to the building
- A variety of documents must be produced by the contractor and given to the owner, including:
- An owner’s manual
- Building user guide
- Health and safety file
- Construction stage report
- Building logbook
- Certificates from the local authority
Who is responsible for practical completion?
The contract administrator is usually the person responsible for issuing a certificate of practical completion. This will usually be a representative at the law firm overseeing the contract.
That said, it is, in most cases, the architect (or the owner’s agent) who judges whether the building has indeed reached the appropriate stage. They will collaborate with the contractor, the building owner and anyone else involved in managing the construction project to assess whether the building is indeed ready to be occupied.
Sometimes the contractor or the owner will push the administrator to issue the certificate of practical completion before it is truly time. The owner may be facing deadlines, while the contractor might want to receive it to improve their completion time statistics or receive their funds as soon as possible. However, the decision should not be rushed or taken lightly due to the legal implications involved.
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About snagging and the defect liability period
Although completion suggests the building is totally ready, it does still allow for a number of defects to remain in the building. As long as they are minor and do not prevent occupation of the structure, these can be added to a snag list which the builder should address during the defect liability period. As noted above, this usually lasts around one year and requires the contractor to fix any minor problems in the building.
Challenges with practical completion
Over the years, there have been many legal cases wrangling over issues to do with practical completion. Why is it such a challenging process?
- Grey areas
The big risk with practical completion is that it is ultimately a professional opinion – and this can be challenged by any party involved. If the contractor, the owner or anyone else feels the opinion is unfair, or that the building was not truly finished at the completion date, there is scope for litigation and disputes.
- No centralised information management
In many projects, information ends up spread across multiple locations. For example, different stakeholders store documents on their own computer systems, in multiple formats. This means there is no ‘single source of truth’ which can lead to misunderstandings.
- Lack of transparency
During the defect liability period, the owner must trust the contractor to complete a snag list. However, without a single, transparent view of what snags exist and how they have been addressed, there is much room for miscommunication and breakdown in trust.
How technology can improve practical completion
If your projects have ever encountered problems around practical completion, you will appreciate just how stressful this can be. However, this is where technology can help.
PlanRadar is a documentation and communication platform for construction projects. It brings together multiple features which can make practical completion transparent and easy to manage – and therefore much smoother and less stressful.
PlanRadar supports practical completion by providing:
- A single place for documentation
PlanRadar is your central hub for all documentation pertaining to a building project. It holds your site diary, reports and images of the building. You can also upload legal files and contracts to a central hub where everyone can view them.
- Transparent snagging tool
During the defect liability period, you can use PlanRadar as a shared snagging tool where issues can be located on a blueprint of the building and shared with the contractor. These can then be addressed, and progress is visible to everyone.
- Legally compliant handovers
PlanRadar supports building inspection which is, of course, a crucial stage in practical completion and handover. The architect or contract manager can use the app to mark up any snags or issues on the blueprint and also upload and digitally sign any inspection reports.
Save time with a digital solution
Despite being one of the most critical stages in a construction project, practical completion is, all too often, a confusing affair. With so much riding on the certificate of practical completion, isn’t it time to reassess how we do it?
PlanRadar digitises practical completion and makes it a transparent, collaborative and efficient process. To learn more, contact us for a demo today.
PlanRadar was founded in 2013 and provides innovative mobile-first software solutions for the construction and real estate industries. Our app is available on all iOS, Android and Windows devices. So far, we’ve helped more than 7,000 customers in over 44 countries to digitise their workflow.