Introduction: Demystifying Completion in Architecture

In the third instalment of our “Construction & Contracts” series, we delve into the concept of Completion—a term that, while seemingly straightforward, harbours numerous complexities and potential pitfalls. This crucial milestone in construction projects often eludes clear definition, making it essential for property owners and developers to grasp its nuances.

For many, Completion represents the long-awaited moment when construction challenges give way to the joys of occupancy and possession of the premises. However, seasoned developers understand that the reality is far more entangled. When Completion is declared, it doesn’t necessarily mean the project is “finished” in the colloquial sense. Different contract types may define Completion in varying ways, adding layers of complexity to this pivotal stage.

Inexperienced owners must also navigate the intricacies of who holds the authority to declare Completion and what responsibilities accompany this declaration. As we explored in our previous article on Maintenance Periods, a contractor’s involvement doesn’t automatically cease upon Completion of the works. This ongoing relationship underscores the importance of understanding Completion in its entirety.

In the following sections, we’ll unravel the various aspects of Completion, equipping you with the knowledge to navigate this critical phase of your construction project confidently.

The Basics: What Does Completion Really Mean?

Contrary to common belief, Completion doesn’t signify the absolute end of a construction project, be it a house renovation or a large integrated development. Rather, it marks a crucial milestone: the point at which the Owner can occupy the premises, provided the relevant authority has issued an occupation permit. This distinction is vital, as Completion doesn’t necessitate a pristine, final product devoid of any further work.

Typically, the Completion process begins with the Contractor notifying that they believe the works have been completed as per the Contract. Subsequently, the Architect, acting as an impartial authority, certifies whether the works indeed comply with the Contract specifications in its entirety. In traditional procurement models, the Architect serves as a crucial third party, safeguarding the Owner’s interests during this sensitive phase and being an intermediary of potential disputes between the Contractor and the Owner.

However, a declaration of Completion doesn’t necessarily halt all work on site. Two scenarios often persist: addressing any defects and completing minor outstanding works. It’s crucial to understand that waiting for every minor task to be finished before declaring Completion would be impractical for the Owners. As long as the premises can be safely occupied, the Architect may certify Completion while providing a list of remaining tasks, balancing the Owner’s desire to take possession with project thoroughness.

Completion Across Contract Types

Understanding how Completion is defined across different contract types is crucial for all parties involved in construction projects. Let’s examine some key contract types in the Singapore context:

In SIA (Singapore Institute of Architects) Conditions of Contract, Completion occurs when all works have been completed and comply with the Contract in all respects. It seems that the contract calls for all works to be finalised. However, reading further, the Architect has the authority to certify Completion, even if minor outstanding works remain, provided they can be completed without unreasonably disturbing the Owner’s full enjoyment and occupation of the property.

The SIA Minor Works contract form, typically used for smaller projects of lower complexity, introduces the concept of “Substantial Completion.” This emphasizes that while the works have been completed in their substantial part, minor outstanding tasks may still need addressing after Completion is certified.

In REDAS (Real Estate Developers’ Association of Singapore) Design & Build contracts, the Contractor applies for a Handing Over Certificate from the Employer’s Representative. One key requirement is obtaining a statutory occupation permit from the relevant authority, which is interestingly not a requirement in the SIA forms.

PSSCOC (Public Sector Standard Conditions of Contract) employs two distinct concepts: “Substantial Completion,” which signifies the project is sufficiently complete for occupation, and “Final Completion,” which occurs after the project’s final accounts are settled and the Defect Liability Period has expired.

These varying definitions across contract types highlight the importance of thoroughly understanding the specific terms in your project’s contract to avoid misunderstandings and potential disputes. So whether you are using a standard form or not, please ensure any terms, conditions and definition is clearly spelled out.

Milestones and Stages: The Journey to Completion

The path to Completion is marked by various milestones and stages, each playing a crucial role in the project’s progression. Initially, the project timeline is established, outlining key dates and deadlines. As construction advances, partial completion milestones may be reached, often tied to payment schedules or specific project phases.

A critical concept in this journey is Substantial Completion, which occurs when the project is sufficiently complete for its intended use, even if minor tasks remain. This stage often allows for occupancy and marks a significant shift in project dynamics. Following Substantial Completion, a punch list is typically created, detailing remaining items to be addressed.

It’s paramount to emphasize that completing the works within the stipulated Contract period is a key objective. Delays can lead to significant consequences: the Contractor may be liable for Liquidated Damages, compensating the Owner for the delay, or the Owner might need to grant an Extension of Time to the Contractor. These crucial concepts will be explored in depth in our next article.

The final stage, often termed Final Completion, occurs when all punch list items are resolved, and the project fully aligns with contract specifications. This milestone typically triggers final payments and the commencement of warranty periods.

What Completion Means for You: The Owner’s Perspective

For Owners, understanding the implications of Completion is vital for protecting their interests and ensuring a smooth transition to occupancy. Primarily, Completion signifies the point at which the Owner can take possession of the property, subject to obtaining the necessary occupation permits from relevant authorities.

Completion also marks significant financial milestones. It often triggers the release of final payments to the Contractor, minus any retention amounts for potential defects. Additionally, it usually initiates the Defects Liability Period, during which the Contractor is responsible for rectifying any defects that emerge.

From a legal standpoint, Completion can shift certain responsibilities and risks from the Contractor to the Owner. This includes insurance obligations and liability for the property’s condition. It’s crucial for Owners to review their insurance policies and ensure adequate coverage post-Completion.

Completion also impacts warranties. While some warranties may commence from the date of Completion, others might start from the installation date of specific components. Owners should carefully review and document all warranty information to protect their long-term interests.

Lastly, while Completion is a significant milestone, it doesn’t necessarily mean the end of the Owner-Contractor relationship. Outstanding works, defect rectifications, and potential disputes may require ongoing interaction. Understanding these post-Completion dynamics is essential for Owners to navigate this phase effectively and ensure the long-term success of their project.

Conclusions: when a project comes to life.

The journey from the inception of design to completion on site is long and challenging. While the Completion stage generally marks the end or near-end of a project, for the Owner, it heralds the beginning of a new chapter, a new story.

At the start of our design journey with clients, especially for private residences, we always emphasize that when our job is finished, the project continues to evolve and take on life. The users themselves, by interacting with the space and making it their own, will continue to “design” in a way.

Just as legal responsibilities transfer to the Owners upon Completion, the spirit of the project shifts towards those who will inhabit the space and how they will change it. As Architects, we find it exciting to revisit completed projects and observe how owners have settled in. Completion is not a final, crystallized phase; rather, it’s the start of a passionate story where the building will hopefully offer something valuable to its users.