What is practical completion, and who decides it?

Practical completion is worth arguing about because six separate things turn on one date. It is not a ceremony at the end of a job; it is the switch that moves risk and money.

1. 01Half the retention is released. The rest is held until the end of the defects period. See retention in construction contracts for how the two halves work.
2. 02Liquidated damages stop. If the job is late, the employer’s deduction stops accruing on this date, which is often the largest single sum in dispute.
3. 03The defects liability period starts. Commonly six or twelve months. Everything found in that window is the contractor’s to put right.
4. 04Insurance passes. The employer becomes responsible for insuring the works. A gap here is how a fire between handover and policy start becomes nobody’s claim.
5. 05Possession passes. The employer can occupy and use the building.
6. 06The final account clock starts. Most contracts run the period for the final certificate from this date.

A date that moves retention, damages, insurance and the defects clock in one step is worth putting in writing on the day, not reconstructing from memory three months later.

There is no percentage. The courts have consistently declined to give one, and contracts that try tend to make things worse rather than clearer. The working test that survives is whether the employer can take the building and use it for what it was built for.

Minor snags do not prevent practical completion. That is settled and it is the point of the word "practical". A door that binds, a patch of paint, a missing escutcheon, these are for the defects period, not reasons to withhold a certificate.

Works that stop the building being used do prevent it. No fire alarm commissioning, no working lift in a building that needs one, no certificate for the electrical installation. The distinction is function, not quantity: fifty cosmetic snags may not prevent it while one missing EICR does.

NoteWithholding a certificate to gain leverage on something else, a disputed variation, an unresolved account, is a common tactic and a poor one. If the works are practically complete, the certificate is due, and refusing it has been found to be a breach.

Most disputes about practical completion are really disputes about paperwork. The building is finished; the record of it is not. Contracts usually make the handover documents a condition, and a certificate issued without them is an argument waiting to happen.

• Health and safety file. required by CDM 2015 where there is more than one contractor. See the F10 and when CDM applies.
• Test and commissioning certificates. electrical, gas, water, fire alarm, emergency lighting, ventilation.
• As-built drawings and O&M manuals. what was actually built, not what was drawn.
• Warranties and guarantees. roofing, windows, flooring, plant, and anything with a manufacturer-backed term.
• Building control completion certificate. or the approved inspector’s final certificate.
• The agreed snagging list. signed by both sides, with dates against each item.

The last one is the one that most often goes wrong. A snagging list written on the day, agreed by both parties and dated, is what lets a defects period close. Without one it runs for years on disputed items.

NEC defines Completion by reference to what the Works Information says must be done, which makes the test documentary rather than a matter of opinion. That is an improvement where the Works Information is good and a problem where it is vague, because then there is nothing to measure against at all.

Two different things, and mixing them up is expensive.

Sectional completion is planned. The contract divides the works into sections, each with its own completion date, its own damages and its own retention. It is in the contract from the start.

Partial possession is not planned. The employer asks to take part of the works early, and the contractor consents. That part is then treated as practically complete: damages stop on it, retention is released proportionally, and insurance passes for that part. Consent is required, an employer cannot simply move in.

NotePartial possession granted informally, with no written record of what was taken or when, is one of the more reliable ways to lose an argument about liquidated damages later.