Why is Construction Substantial Completion so Crucial for Construction Industry?

Overview

Construction Substantial Completion is when a contractor is not responsible for the projects, and the owner bears the liability. At this time, the contractor should partially receive the balance of the contract. As a whole, it means that the contractor has sufficiently completed the work. It becomes necessary for the contractors and owner to agree upon the deadline to meet the current project which also protects both the parties. In writing both the contractor and the owner should entrust the original contract. 

Contractors can make claims to be paid that can either is majority or rest of any payments after substantial completion of construction. It also impacts when claims and warranties can be acted upon.

There are certain options on to which the contractor can include points in construction substantial completion to mark on contract:-

Certificate of Occupancy: – It states that the substantial completion of the construction project would be in effect when the building reaches its point of the certificate of occupancy. This means that the building is ready for occupants to stay and can be used for construction purposes. Only then would the contractor be entitled to receive payment and make changes that are liable.

List of Substantial Completion: – Contractors and owners need to create a list that needs to be accomplished before the Substantial completion is granted. All the items mentioned in the list have to be agreed by both the parties. The contractor can pass on the work mentioned in the list to the owner before he wants any other work to be completed.

Contractor Expertise: – This option is completely for the contractor to know when the building is ready for substantial completion. Some contractors may take disadvantage of this option while other contractors tend to skip the listing they had agreed too. For-profit, a contractor needs to complete the project.

What Problem does it cause?

Any projects such as certified projects or commissioned projects can bring difficulties into the date of substantial completion in construction. It includes many things to remember while you get into a contract that how much time would the project take and completed because only then the contractor would be liable for receiving the payments. On the basis of time take to complete the projects measures the performance of contractors.

Solution to causes:-

So while commencing the contract in writing it should have certain points that should be mentioned clearly and agreed by both the parties such as the owner’s project requirements documents and a basis of design documents. Critical interferences between the systems should be mentioned. Authority and decentralization of work is the most important aspects of the construction industry as it states that who is accountable for what work performed, who reviews it and approves the results.

What Role does BIM play to help Contractors to finish work on time?

The owner hires architects for designing part of the building later it goes to contractors who are a most crucial part in construction as they are under pressure to work faster, more cost-efficient and execute the ideas of architects. They subject to tight deadlines and complex calculations. Contractors are turning to BIM after passing by from so many hurdles. Within one building model, all the parties involved in the construction can access design and information on the processes and materials of the project. By using BIM, contractors are able to detect possible errors prior to the construction process and plan the budget and orders accordingly.

With BIM Modelling Services, Communication between contractors and owners can be improved, and accountability of the project can be easily attained through a shared model. Accurate bids can help estimators identify gaps and risks. It improves access to warranties, claims and other information after a handover.

Conclusion

Construction Substantial Completion is the most common term but misunderstood by many in the construction industry. This is a legal contract that mentions the work and responsibility of contractors that is well accepted by the owner, and under this contract, it supports the claim of contractors easily. Giving many benefits and at the same times many disadvantages to contractors and owners to understand the relationship and how to maintain it.