Substantial Completion: What Is It?
While substantial completion is similar to the general contract principle of substantial performance, substantial completion is targeted more towards the construction industry. Substantial completion can be characterized as the point during a construction project in which the property owner gains possession of the building; typically with only minor work remaining. The American Institute of Architects defines substantial completion as, “the stage in the progress of work when the work or designated portion thereof is sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the work for its intended uses.”
Why It Matters to You
As a working professional in the construction industry, it is important to understand the implications of substantial completion.
Implications For Contractors
For contractors, the date of substantial completion is often established prior to the initiation of a construction project, and is typically the date by which the contractor is required to fulfill their contractual obligations. The project completion date that is outlined in the contract also controls the contractor’s project schedule, and when achieved, may prompt payment to the contractor. When substantial completion is not achieved by the project completion date (contract permitting), penalties or claims of damages may ensue.
The date of substantial completion is important to contractors because it is the date by which the contractor is released from full liability of delays and minor incomplete details. As St. Petersburg contractor lawyers, we recommend contractors to understand the definition of substantial completion and clearly identify it in their construction contracts.
Implications For Design Professionals
For design professionals, the date of substantial completion starts the clock for the statute of limitation and the statute of repose. The statute of limitation is a four year time-frame in which a claim for construction defects due to negligence can legally be made. The statute of repose is a ten year time-frame within which a discovery of a construction defect would give way for a claim to be made. Meaning, design professionals may be exposed to claims for negligence for up to 14 years after substantial completion. If you have been given notice of a construction defect, we advise that you speak with an experienced St. Petersburg contractor lawyer who is familiar with such claims.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.