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Substantial Completion and Construction Defect Cases

Wherever performing construction work, business owners should know that there’s a specific time period in place that mandates whether or not another party can bring action against you for a construction defect. This concept is referred to as the statute of repose. For Tennessee-based contractors, architects, and engineers, the statute of repose is only four years from the “substantial completion” of work. 

In this article, a Nashville license defense lawyer will discuss what exactly the substantial completion of work entails. Remember, if you have been accused of a construction defect in Tennessee, or you require license defense services, consult the Nashville construction litigation attorneys at Cotney Construction Law.    

Tennessee’s Statute of Repose is a Short Time Period

With only four years to bring action against a contractor for a construction defect claim in Tennessee, the statute of repose defense is one of the most effective available to a contractor who’s accused of a construction defect. Although there are some exceptions to this deadline, including when a party was injured as a result of a defect or if fraud was at play, the fact is that the statute of repose in Tennessee provides owners a significantly tighter window to take action than the majority of other states across the United States. 

The Plaintiff’s Strategy

Because of this difficult timeline to navigate a construction defect claim, the plaintiff’s legal counsel will often try to cleverly work their way around the statute of repose in order to make a valid claim. Because of the nature of construction work, a common strategy by the plaintiff’s counsel is to dispute that the work on the project was not substantially completed. Moreover, because the work was allegedly incomplete, the plaintiff’s counsel will claim that this was the catalyst for the defect claim. In other words, the plaintiff’s counsel is alleging that because a crucial element was missing from the completed work, the “finished” work was not actually substantially complete and led to whatever issue prompted the defect claim.  

The Criteria to Determine Substantial Completion

Substantial completion essentially means that a project is sufficiently complete, meaning that the completed work aligns with what was detailed in the construction contract. Moreover, work that meets the definition of substantial completion also means that the owner can now utilize the property for its intended use. 

Other criteria for determining if a project is substantially complete includes:

  • Granted Approval: the completed work has been granted approval by the proper authorities. In other words, the owner of the project or government agency overseeing the project approved the work and deem it substantially complete.
  • Received All Documents: the owner has received all the documents they need that are related to the project for future use. This can include everything from warranties to additional documentation related to the scope of work. 
  • Owner’s Intended Use: at the substantial completion of work, the owner can now utilize the property for its intended use. For residential work, this could mean that residents can move into the property. For commercial use, this could mean that businesses can now sublease the property. Regardless, the owner is enjoying an economic benefit from the completed work.  

The Legal Definition of Substantial Completion in Tennessee

Although the definition of what exactly constitutes substantial completion may vary state by state, under Tennessee law, T.C.A. § 28-3-201(2) defines substantial completion as follows:

(2) “Substantial completion” means that degree of completion of a project, improvement, or a specified area or portion thereof (in accordance with the contract documents, as modified by any change orders agreed to by the parties) upon attainment of which the owner can use the same for the purpose for which it was intended; the date of substantial completion may be established by written agreement between the contractor and the owner.

To learn more about the criteria of substantial completion in a construction defect claim, speak with a Nashville construction litigation attorney who has a firm understanding of Tennessee state law.   

Final Thoughts on Substantial Completion

Although a contractor needs to seek approval from an owner when they complete a project, substantial completion essentially means that the scope of work adheres to the expectations outlined in the construction contract. Substantial completion does not mean that the work was perfectly completed or that there will never be any outstanding work that needs to be performed to improve the overall quality of the structure. Substantial completion simply means that the work was completed to the quality defined in the contract, it was approved by the proper authorities, and the structure can be used for its intended purposes.  

If you would like to speak with a Nashville license defense attorney, please contact us today.

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.