Practical completion is the hinge of a building contract. It stops delay damages, releases part of the retention, starts the defects period and begins the sequence that closes the account. Where it was never certified, all of those remain unresolved, which is why it is examined early in a retention recovery assessment.
What it means is a question of contract and of fact, and the forms deliberately leave the judgement to the certifier rather than defining it precisely.
What it is generally taken to mean
That the works are complete for all practical purposes and can be used for their intended purpose, with only minor items outstanding.
It is not perfection, and a short list of minor snags does not usually prevent it, though there are limits that depend on the circumstances.
Nor is it simply occupation, although occupation is strong evidence and is treated as such.
What it triggers
Release of part of the retention, usually half. The end of liability for delay damages. The start of the defects period. And the beginning of the sequence leading to the final certificate.
Those consequences are why it is contested: the same date moves money in several directions at once.
It also commonly transfers responsibility for insurance and for the building itself, which matters practically as well as financially.
Where it is never certified
The commonest pattern is an employer taking occupation without a certificate being issued, either because nobody asked for it or because the employer preferred not to.
That leaves the retention unreduced, damages theoretically running and the defects period unstarted, which suits nobody in the long run.
It also leaves the employer in an awkward position, since the building is in use and the works are being treated as incomplete.
Evidence that the works were complete
Occupation and use, with dates. Handover of keys, manuals and warranties. Connection and commissioning of services. Statutory sign offs and completion certificates from other bodies.
Correspondence treating the project as finished, including requests to attend to snags, which implies that snags are what remained.
None of those is conclusive on its own and together they are usually persuasive.
Where completion is genuinely disputed
Where significant work remained, or where the building could not be used for its purpose, the certifier is entitled to withhold the certificate.
The question is whether the outstanding items prevent practical use or are merely items to be put right, which is a judgement rather than a calculation.
Framing it around that test, with evidence, is more productive than asserting that the project was obviously finished.
Partial possession and sectional completion
Where the employer takes possession of part, most contracts treat that part as practically complete, with proportionate consequences for retention and damages.
Where the contract provides for sections, each has its own date and its own consequences.
Both are frequently overlooked, and both can release money long before the project as a whole completes.
Getting a certificate issued
Ask, in writing, with the evidence attached and the outstanding items listed and offered for inclusion on a snagging schedule.
Where the certifier declines, ask for the reasons and for the items relied on, which converts a silence into a position that can be addressed.
Where the role has lapsed, that is a problem for the employer to resolve, and saying so plainly in writing is entirely reasonable.
What to do while it is unresolved
Record the state of the works and the fact of occupation, with dates and photographs.
Continue to deal with snagging items, since doing so costs little and removes the argument that the works were never actually complete.
And keep the correspondence factual, because this is a question that may eventually be decided by somebody reading the file.
The commercial stakes
Half the retention, the liability for damages and the start of the defects clock all turn on it, which on a project of any size is a substantial sum.
That is why it is worth establishing properly rather than leaving as an ambiguity, which is what frequently happens.
It is also why a certificate issued promptly and accurately is in both parties’ interest, whatever the short term temptation.
Deemed completion and occupation
Some contracts provide that taking possession of the whole works has the effect of practical completion, with or without a certificate.
Where that provision exists, occupation settles the question rather than merely evidencing it, which is a considerably stronger position.
Checking whether your contract contains one is a short exercise with a potentially large answer.
The snagging list that is not the point
Long snagging lists are produced at handover on almost every project and they do not usually prevent practical completion.
The question is whether the outstanding work prevents the building being used, not how many items are on a list.
Employers sometimes use list length as the reason to withhold a certificate, which conflates two quite different questions and rarely survives examination.
Certificates issued under pressure
Certificates are sometimes issued because a funder or a purchaser requires one, rather than because the works are complete.
Once issued, the consequences follow regardless of the reason, which is worth understanding before issuing one.
Employers occasionally find they have released retention and stopped damages running in order to satisfy a lender’s requirement.
Where it fits
The completion question is usually the first thing a retention assessment looks at, because everything else depends on it.
Where damages are also in issue, the same date governs both and they are usually addressed together, which brings in extension of time work.
Certifying completion properly at the time belongs with contract administration and it prevents most of this.
Retention that has not come back?
A retention recovery assessment establishes the balance from the certificates, fixes the release dates from the contract and sets out what has to happen before the money falls due.