Last edited 25 Apr 2018

Early use

As construction nears completion there can be considerable pressure to allow 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.

This can be programmed as part of the works through a requirement for sectional completion, but in the absence of such a provision many contracts offer the more open-ended option of early use.

Early use allows the client to use part of the site before the project is completed, i.e. practical completion is not deemed to have occurred. With early use, the risk remains with the contractor. This differs from partial possession, whereby the risk passes to the client, and any part to which it is given use is deemed to have achieved practical completion.

In addition to the certification of practical completion not being triggered by early use, neither is the commencement of the rectification period, release of retention, or liquidated and ascertained damages (LADs). However, if any delay or disruption is caused by the client to the works as a result of their early use, it may bring about claims by the contractor for extensions of time and loss and expense.

It can be difficult to distinguish between partial possession and early use, and the application of the terms will often depend on the particular circumstances, the correspondence between the parties, and the provisions of the contract. Often, parties will adapt the standard forms of contract to make it easier to distinguish, such as by including an agreed access regime clarifying when and how the client can occupy works without triggering partial possession. It can also be amended so that the contractor waives their rights to make a claim for extension of time, and so on.

The courts tend to focus on establishing which is the relevant part of the site and which party has exclusive possession of it. If the client has exclusive possession then partial possession provisions will apply. If the contractor has exclusive possession then the early use provisions will apply.

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