Substantial Payment

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Substantial Payment

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This certification often includes a punch list of small items that still need finishing and its corresponding timeline to complete them. This is usually the point where the contractor satisfied any remaining contract terms and requirements, and they have the architect or construction manager perform final inspection.

When that is completed, the contractor receives all the remaining funds they are due. The value of the final certificate is determined by the final account agreed by the contractor and the cost consultant.

From the definitions above, it is understood that substantial completion comes before final completion.

From a legal standpoint, the date of substantial completion is considered more crucial between the two because the Certificate of Substantial Completion triggers a number of important events and timed periods:.

This is one reason it is important for that date to be precisely defined and recorded for each construction project — unclear or undefined dates just add to the resources spent in the already costly and time-consuming litigation.

Do you need help with determining the substantial or final completion dates for your construction project?

Perhaps you want an expert to review the documents so as to avoid long-term losses due to delay claims and costly litigation? Whatever your issue, Xpera Group has dealt with it before.

Our knowledgeable construction experts approach each assignment with a professionalism born of extensive experience. Reach out to us today and let us guide you safely through the trenches of construction challenges to reach resolution!

Xpera Group Blog. What exactly is substantial completion? The list of items is specified inside the construction contract documents.

The parties agree on using the certificate of occupancy issued by the local jurisdiction as the substantial completion milestone date.

What about final completion? However, there still are some non-material aspects left uncompleted on the project, such as punch work.

Given the inherent difficulties in determining what substantial completion is, many owners and contractors look to minimize their risk by defining the term in their contract.

The best option is to make a project-specific definition of what substantial completion is — like a particular milestone. However you decide to define substantial completion, specificity is critical!

The amount of money and important deadlines that are tied to substantial completion illustrates how important this is. The more ambiguity in your definition, the higher the risk or disputes concerning payments and liability.

Typically, we work as a subcontractor on construction projects in California. Our work is usually completed at the beginning of the job.

This means we may have months go by after our work before the full job is completed. All the while, there may be some money owed I am an investor and i contracted a contractor to rehab a investment property.

The contractor walked off the job and advised me that he owed about 4 subs. As an investor am I obligated I am the homeowner and am withholding final payment on a renovation project because the bucket list wasn't completed.

Can the contractor put a lien on my home. View Profile. A Schedule of Values is an essential tool used in construction project accounting that represents a start-to-finish list of work Read more.

Lien waivers and lien releases are completely different documents even though they are often confused by the construction industry. What are lien waivers in construction?

This article is the ultimate guide for construction lien waivers including essential information and It's calculated Back to blog.

Substantial Completion in Construction: Why it matters. Table of Contents. What Constitutes Substantial Completion?

Why Does it Matter? Substantial completion is a crucial milestone on any project; this date affects everyone's obligations, payment rights, and starts the clock on important deadlines.

Alex Benarroche. Publisher Name. See all Experts. What are best practices to track Notices of Completion in California, and do preliminary notices help?

Do i I am an investor and i contracted a contractor to rehab a investment property. He graduated from Loyola University College of Law and went on to get a master's degree in intellectual property and Internet law from the University of Alicante in Spain.

Since then his practice mainly focused on contracts, business law, and IP.

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