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Last edited 06 Oct 2020
Construction management: occupation and defects liability period
The occupation and defects liability period takes place after the client has taken possession of the development for occupation. During this stage, any defects are rectified and the final certificate is issued signifying that the construction works have been fully completed. As the development is now occupied, and the construction manager no longer has possession of the site, close co-operation is required between the construction manager and the client so as so not to disturb occupants, whose activities will take priority over trade contractors rectifying defects.
On construction management contracts, a separate certificate of practical completion is issued for each trade contract. This means that defects liability periods may be at different times for each trade contract and as a consequence, the construction manager may continue to hold construction progress meetings and issue construction progress reports for continuing trade contracts and may have to protect completed work from continuing work.
If the contract allows, the construction manager may review all relevant events that might be considered to have affected the completion date for each trade contract and may adjust their completion dates accordingly.
The client reports any defects in the works to the construction manager. On large projects the construction manager may set up a hot desk for responding to any complaints or to provide assistance required by the incoming occupants. The construction manager takes advice on the action necessary to rectify the defects from the consultant team, and the construction manager and client agree a programme for rectifying defects in a way that minimises disruption to the client.
If rectification works are significant, it may be necessary for the client to re-appoint the principal designer (whose appointment may have terminated on certification of project completion) and it may be necessary to amend the health and safety file.
At the end of the defects liability period for each trade contract, the construction manager arranges inspections of the works and prepares a schedule of defects which is issued to the trade contractor. The construction manager agrees the programme for rectification of items on the schedule of defects with the client and trade contractors, which should in any event be rectified within a reasonable time.
The trade contractor rectifies items listed on the schedules of defects, informs the construction manager and provides the construction manager with information for the preparation of the final account. The trade contractor and construction manager agree the final account for the trade contract.
The construction manager arranges final inspections of the trade contractors works and if satisfied issues a final statement (payment notice) for that trade contract. If the client intends to pay a different amount from that shown on the statement, then construction manager must issue a pay less notice giving the basis for the calculation of the amount they intend to pay. The client makes payment by the final date for payment. This may include the release of any remaining retention if applicable.
 Issuing the final certificate.
Issuing the final certificate will normally signify the end of the construction manager's and consultant team's appointments. If post-occupancy evaluation services are required, these may involve a new appointment.
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