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How to avoid pressure to sign off early on practical completion

Signing off a project at the wrong time can be a costly mistake. But architects may find themselves under pressure from competing demands of client and contractor. Construction lawyer Bill Barton explains the common pitfalls surrounding practical completion

19 August 2021

Most complaints faced by architects have, in practice, little to do with design, explains construction lawyer Bill Barton, Director of Barton Legal. Complaints are usually related to contract administration or inadequate communications with the client.

Practical completion is one common cause of complaint. Architects may find themselves under pressure from the contractor or client over the timing of practical completion. Getting this wrong could lead to a building defects dispute, with the architect facing a disciplinary hearing.

There is no standard, official definition of practical completion. At its simplest, practical completion signifies:

  • the point at which the project is handed over to the client
  • the point at which works set out in the contract are deemed to be have been completed

It is a turning point for the contractual treatment of any defects, which are the most likely source of client complaints and professional conduct hearings.

Practical completion marks the start of the defects liability period: when the contractor can be asked to rectify defects that become apparent. Any defects identified prior to practical completion should have been rectified by the contractor before certification.

Where does the pressure for early practical completion come from?

“Ideally, practical completion should be an objective, not a subjective, decision taken by the architect as contract administrator when all parties – architect, contractor and client – are in agreement,” Barton explains.

But often the architect will come under pressure to sign off completion early or, conversely, to delay it. For example, on a residential project, a client might be keen to take possession and move in and ask for certification even if it is premature.

If the architect were to agree, they must then advise the client that this will mean accepting the house in the state it is in. This would effectively be granting the contractor a release from the works contract.

In this instance, the architect might be tempted to agree to certify practical completion, but to withhold a proportion of the contractor’s fee subject to a list of snagging works being completed.

This might be a viable solution, but Barton points out that it is risky: a contractor might walk away, judging it more cost effective to miss out on the remaining fee than to deal with the defects. The client could then take the architect to task for being left with no remedy for defects.

Contractors might seek a premature practical completion because they want to be paid, or because they have other work to carry out. They might encourage the architect to reassure the client that they will be back to take care of any snagging.

Specifying, in very literal terms, what practical completion will constitute in your appointment documents can avoid unpleasant disputes later. Regular communication between all parties, and making sure that everyone’s expectations are managed, is invaluable.

Project delays and Extensions of Time (EOTs)

Such situations can become more complicated when there have been delays to a project, perhaps due to issues on site. If the architect takes the view that a delay was beyond the contractor’s control, they can grant them an extension of time (EOT). The contractor then would become liable only for delays not covered by the EOT.

An EOT may be used to justify some, or all, of a delay in signing the practical completion date, with an impact on any damages for delays that might be subsequently claimed.

The contractor should normally provide written notice to the contract administrator identifying the cause(s) of the delay before an EOT is considered. An architect may find themselves caught in the middle: facing a contractor arguing that some of the delay is due to the client; and a client in turn pushing for a reduction in the EOT.

Clear appointment documents and good communication

Objectivity is the keyword for an architect signing off practical completion, Barton emphasises. If the architect’s decision is seen as being subjective concerning practical completion or an EOT, they may face charges from the client of being too partial towards the contractor, and vice versa.

Strong appointment documents are extremely valuable in this regard. He suggests one way to head off practical completion disputes is to have highly detailed project specification, where this is practicable.

“If the specification covers everything, then you should be able to say in the contract that practical completion will happen when the entirety of the specification is completed.”

This specification can be a separate document agreed between client and contractor and exchanged when the contractor is pricing the work.

However, good communication throughout the project is even more important. Managing expectations from the outset can mitigate all kinds of unexpected problems and delays for architects.

“At the start of a project, everybody is friendly to each other,” Barton points out. “This is the time to have difficult conversations that raise the ‘what if’ questions about the project, and to discuss what practical completion will mean for the client and contractor. Not enough time is spent at the beginning of a project having a dialogue.”

Barton was a member of the task force that drew up the RIBA’s new Code of Professional Conduct and its Disciplinary Procedures, and he is familiar with how disciplinary hearings tend to unfold.

“Conduct hearings stress the need for dialogue. Architects can help themselves by looking ahead at what might be a problem or cause for complaint when practical completion comes to be signed. It is better to have these discussions at the beginning when there is goodwill between all parties.”

Bill Barton will present a CPD session on Navigating Professional Conduct Requirements at the RIBA conference Guerrilla Tactics: Stop, Collaborate and Listen. It takes place online from 9 to 11 November 2021. Tickets are now available.

Thanks to Bill Barton, Director, Barton Legal.

Text by Neal Morris. This is a Professional Feature edited by the RIBA Practice team. Send us your feedback and ideas.

RIBA Core Curriculum topic: Legal, regulatory and statutory compliance.

As part of the flexible RIBA CPD programme, professional features count as microlearning. See further information on the updated RIBA CPD core curriculum and on fulfilling your CPD requirements as a RIBA Chartered Member.

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