Practical completion is the stage at which a building can be said to be in a state ready for occupation by the client without inconvenience. This is probably the most difficult clause in the contract to interpret fairly to both client and contracttor. It is excessively inconvenient and frustrating for a client who has moved into a new building to find sections of an otherwise complete building in need to making good, or with a couple of light fittings missing. On the other hand, it is impossible to say the building is not capable of being occupied. It is often equally inconvenient for the contractor to try to complete the work while the building is occupied and people are wanting him out of the way, with the result that it is almost impossible to get a contractor back once the client is installed.
It is essential, therefore, that the architect insists on completion offering beneficial occupation before the builder leaves the site. This means that the building is practically complete pending settlement of the defects at the end of the defects liability period stated in the Articles of Agreement. Certification of practical completion is certification of completion as far as liquidated and ascertained damages are concerned, and this certificate has the effect, where appropriate to the particular articles being used, of releasing in a complementary certificate of payment to the contractor the agreed proportion of the retention figure as stated in the Articles of Agreement.
When the contractor has overrun the agreed contract time, including any extension of time that has been granted, he should be informed that the work should reasonably have been completed and therefore, as from that particular date, the liquidated damages clause will come into operation and that future certificates will be endorsed ‘subject to whatever may be the rights of the employer under the liquidated damages clause of the contract’, or other similar qualification.
The architect must in no way prejudice the rights of his client to invoke this clause, and for this reason he should endorse the certificates.
Certification of Practical Completion represents the date from which the Defects Liability Period will run. It is the transfer from contractor to the client and the date from which the client must undertake insurances.