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Last edited 14 Jan 2019
The term ‘completion’ is often used in the context of buildings and construction projects, but there is no precise legal definition, and its meaning is dependent on the situation in which it is being used.
In the context of property, completion is the point at which the price of the property is paid and transfer documents are dated, thereby completing the final step in the legal process of transferring the ownership of property.
Most construction contracts will set a date by which the works described in the contract must be completed. However, this is not the date by which all obligations under the contract have to be discharged, but only the date by which 'practical completion' must be certified.
There is no absolute definition of practical completion, but very broadly, practical completion is deemed to have occurred when all the construction works that are described in the contract have been carried out, and the contract administrator issues a certificate of practical completion. For more information see: Practical completion.
This is followed by a defects liability period during which the contractor may be recalled to rectify defects which appear. At the end of the defects liability period, the contract administrator prepares a schedule of defects, listing those defects that have not yet been rectified, and agrees with the contractor the date by which they will be rectified. When the contract administrator considers all the items on the schedule of defects have been rectified, they issue a certificate of making good defects.
In effect, this marks the completion of the works. There may still be latent defects, which do not appear for some time, however, the building owner no longer has a contractual right to insist that the contractor rectifies any defects, and they must instead seek redress in an action for damages, for breach of contract, or for negligence. In the case of dwellings there is a statutory remedy provided by the Defective Premises Act 1972.
NB: Sectional completion refers to a provision within construction contracts allowing different completion dates for different sections of the works. This is common on large projects that are completed in sections, allowing the client to take possession of the completed parts whilst construction continues on others. See Sectional completion for more information.
Partial possession clauses may permit the client or tenants to take possession of part of a building or site, even if the works are ongoing or there are defects that have not been rectified. See Partial possession for more information.
Under other commercial contracts (i.e. those that relate to goods and services), the contract performance is not considered 'complete' until the obligations imposed by the contract have been fulfilled.
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