Final certificate for construction contracts
The final certificate is certification by the contract administrator that a construction contract has been fully completed. It is issued at the end of the defects liability period and has the effect of releasing all remaining money due to the contractor, including any remaining retention.
The value of the final certificate will be based on the final account agreed by the cost consultant and the contractor. This means that all patent defects must have been remedied, all adjustments to the contract sum must have been agreed and all claims settled.
Where proceedings have been commenced in relation to a dispute, the conclusiveness of the final certificate is subject to the findings of those proceedings. In addition, the final certificate itself can be disputed (usually within 28 days). Adjudication, arbitration or other proceedings may then be necessary to resolve the dispute. The final certificate is then only conclusive in relation to matters that are not disputed.
If the client intends to pay a different amount from that shown on the certificate, then they must give notice to the contractor of the amount they intend to pay and the basis for its calculation (pay less notice - see Housing Grants, Construction and Regeneration Act for more information).
In construction management contracts, where there are a number of trade contracts, final statements are issued for each trade contract. Once final statements have been issued for each trade contract, the construction manager co-ordinates preparation of the final report and issues the final certificate for the whole project.
There is a similar procedure on management contracts, where final certificates are issued by the management contractor for each individual works contract, and then once all works contracts have received a final certificate, the management contractor provides the client's contract administrator (or cost consultant) with information allowing them to calculate the prime cost (the cost of the works contracts) and a final certificate is issued to the management contractor.
NB Rather confusingly, the term 'final certificate' can also refer to a completion certificate issued by a building control body in relation to the building regulations. See Building regulations completion certificate for more information.
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