Practical completion in practical terms

To explain to readers the importance of achieving practical completion would be to tell you how to suck eggs. This article is being written during Lent so eggs, for many, are off the menu anyway. I will therefore cut to the chase.

If “practical completion” is the aim of all building projects, why does the JCT fail to define it? Perhaps it is deemed simply too obvious to require a definition. JCT puts the onus on the Architect/Contract Administrator to certify when the works have, in his opinion, “achieved practical completion”. PC cannot be certified unless the as built drawings and relevant information for the Health and Safety file have been provided. The JCT SBC sets out the obligations on the Contractor during the DLP but doesn’t actually have a specific provision for dealing with snagging.

Given the potential complications that can arise from “partial possession” and “early use”, not to mention issues of sectional completion, coupled with the significant consequences of late practical completion, I for one am amazed that such a woolly situation persists.

You would do well therefore, to give your own definition of “practical completion” in each contract. Some legal resources suggest reference to when the building project is “capable of beneficial occupation and use”. In my opinion, that leaves two questions: (1) Use as WHAT exactly; and (2) what if the contract is for shell only, with fit out being carried by someone else?

To be clear, it is not my intention to encourage people to be so prescriptive as to devalue the input of the architect/contract administrator. My point is simply that you need to clarify the definition in order to avoid an argument (or make any such argument easier to resolve). With so much riding on the precise date of PC, and given that the whole purpose of the project is to get to that point, it probably deserves a little more of your attention at the start.

If you have any questions about using definitions in contracts, or how to resolve disputes arising, please contact Anna Wood – anna.wood@bpe.co.uk or 01242 248215.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.