Widerman Malek Law Blog

Why is the Timing of Substantial Completion so Important?

Why is the Timing of Substantial Completion so Important?

The contract is the first place to look to determine the specifics of when a certificate of substantial completion should be issued. Assuming it is the point where a certificate of occupancy (CO) is also issued, this means that the governing authority has to approve the building to be occupied and used for its intended use. At this point, the contractor will often prepare a list of items to be completed for the architect and/or engineer to review and inspect. The architect and/or engineer will prepare the certificate of substantial completion and set a deadline to complete the final items. Depending on the contract, this is usually the point where the owner will have to pay the “final” payment minus costs to complete the final items. This is the number one reason issuance of the certificate of substantial completion is so important to a contractor (and/or subcontractor).

What is a Certificate of Occupancy and do you need one?

What is a Certificate of Occupancy?

A certificate of occupancy or CO in theory is very simple. It is the approval from the local jurisdiction that allows anyone other than construction workers, engineers, etc. to occupy the structure, with some exceptions that this article does not address, such as for industrial structures and projects. This sounds simple enough, but in order to receive a CO, the structure is typically required to be nearly finished, but not necessarily completely finished. It is often times the point at which substantial completion occurs, but case law is clear that they are not necessarily the same and in fact, receiving a CO is certainly strong evidence that substantial completion has occurred, but not necessarily the only evidence needed. For further information about substantial completion, visit my blog on substantial completion.

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