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Last edited 13 Oct 2015
Public project: occupation and defects liability period
The occupation and defects liability period follows practical completion. It is the stage after the client has taken possession of the development for occupation when any defects are rectified and the final certificate is issued signifying that the construction works have been fully completed (although on some projects, the integrated supply team may go on to operate the development). As the development is now occupied, close co-operation is required between the integrated supply team and the client so as so not to disturb occupants.
Depending on how experienced the client is, they may appoint external consultants to assist them. This means that some of the tasks attributed to the client below might actually be carried out by independent client advisers, a project manager or a contract administrator (employer's agent on design and build projects) and vice versa.
We attribute contract administration tasks (such as making payments under the construction contract) to a contract administrator. Under some forms of procurement (such as design and build) the contract administrator (sometimes referred to as the employer's agent) will work for the client, however, on private finance initiative (PFI) projects, the client will not be a party to the construction contract and will not make payments for construction. Instead, the body funding the integrated supply team (perhaps a special purpose vehicle (SPV)) will take on the role of client for the construction contract and so they may appoint the contract administrator.
The client reports any defects in the works to the contract administrator (or integrated supply team). On large projects the integrated supply team may set up a hot desk for responding to any complaints or provide assistance required by the incoming occupants. The integrated supply team 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 co-ordinate amendments to the health and safety file.
If any amounts are due to the integrated supply team, they prepare interim applications for payment. The contract administrator checks applications for payment and issues interim certificates (payment notices).The notices must be issued within five days of the dates for payment set out in the contract. If any amounts are to be withheld, a pay less notice must be issued giving notice of the amount that will be paid and the basis for its calculation. The client (or funder) makes interim payments by the final date for payment.
At the end of the defects liability period, the contract administrator arranges inspections of the works and prepares a schedule of defects which is issued to the integrated supply team. The contract administrator agrees the programme for rectification of items on the schedule of defects with the client and integrated supply team.
The integrated supply team rectifies items listed on the schedules of defects and informs the contract administrator. The contract administrator arranges final inspections of the works and if satisfied issues the certificate of making good defects.
If a site waste management plan has been prepared, the integrated supply team 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 certificate.
The client (or funder) and integrated supply team agree the final account. The contract administrator checks the final account and issues the final certificate (payment notice). If any amounts are to be withheld, a pay less notice must be issued giving notice of the amount that will be paid and the basis for its calculation.
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