Have I Reached Substantial Completion?

Abstract

This paper reviews the important issues related to determining if substantial completion of a construction project has been reached. This milestone is important because it means that the contractor is entitled to the release of retainage, less deductions for uncompleted work. Because the owner has the right to occupy and use the facility, there can be no breach of contract beyond this point in time because of late completion. Liquidated damages cannot be assessed beyond substantial completion. Equipment warranties also take effect. Four questions are addressed: Was the purpose of the project defeated? Did the owner benefit from using the project? How extensive are the defects? And, how easy are the defects to correct? Of these questions, the principle one is whether the purpose of the project was defeated. If no, or if the owner benefitted from the work, substantial completion has likely been achieved. Several examples are given.