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Last edited 13 Oct 2015
Design and build: 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 contractor no longer has possession of the site, close co-operation is required between the contractor and the client so as so not to disturb occupants, whose activities will take priority over work required to rectify defects.
The client reports any defects in the works to the employer's agent. On large projects the contractor may set up a hot desk for responding to any complaints or to provide assistance required by the incoming occupants. The employer's agent instructs the contractor to rectify the defects and the contractor 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 to re-appoint the principal designer (whose appointment may have terminated on certification of practical completion) and it may be necessary to amend to the health and safety file.
The employer's agent checks applications for payment and issues payments notice to the contractor. The notices must be issued within five days of the dates for payment set out in the contract. If the client intends to pay less than the notified amount, a pay less notice must be issued giving notice of the amount that will be paid and the basis for its calculation. The client pays the contractor by the final date for payment.
At the end of the defects liability period, the employer's agent arranges inspections of the works and prepares a schedule of defects which is issued to the contractor. The employer's agent agrees the programme for rectification of items on the schedule of defects with the contractor, which should in any event be rectified within a reasonable time.
The contractor rectifies items listed on the schedules of defects and informs the employer's agent. The employer's agent arranges final inspections of the works and if satisfied issues a statement confirming that the defects have been made good.
If a site waste management plan has been prepared, the contractor may reconcile the planned handling of waste (as described in the site waste management plan) against what actually happened and provide an explanation of any differences.
 Issuing the final statement.
The employer's agent checks the final statement and gives notice to the contractor of the amount to be paid. If the final statement is not disputed it becomes conclusive that all items identified in the employer's requirements as for the 'approval' of the client are be deemed to have been approved. It is also conclusive regarding extensions of time and claims for loss and/or expense.
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