Practical and final completion both relate to the concluding stages in the building contract which are presided over by the Contract Administrator.
A Practical Completion meeting is held between relevant parties and a walk-round of every room in the building takes place by the CA making notes of all defects. Occupation/use of the proposal will often follow practical completion. Issue of the practical completion certificate (along with a list of minor items to be immediately rectified) will trigger the release of half of the agreed retention (retention being an agreed percentage of the contract sum which is withheld from each monthly payment to the Contractor). Issue of the Practical Completion Certificate initialises commencement of the defects liability period or rectification period. Typically this can last for 3 – 6 months but can be longer depending on the type of development and what has been agreed.
The CA has 14 days from the end of the rectification period to provide the Contractor with a list of defects including any outstanding items from Practical Completion and any that have arisen during the rectification period. On notification from the Contractor that all defects have been rectified a final inspection will be carried out. Once all defects have been rectified, a certificate of making good defects can be signed and issued.
A final Completion certificate can be issued releasing the remaining retention monies.