REALWorld Law



Does the law state what has to be achieved before 'completion' of the building works can be certified and, if so, can this be overridden by specific terms in the contract? Who would certify completion of building works carried out in accordance with a construction contract?

United States

United States

The common law ‘doctrine of substantial completion’ provides that the project is substantially complete, if it is ‘nearly equivalent’ to what was bargained for. Ocean Ridge Develop. Corp. vs. Quality Plastering, 247 So.2d 72, 75 (Fla. 4th DCA 1971). Courts and the construction industry in the US generally interpret this to mean that the owner can use the building for the purpose intended. One of the significant indicators that a building can be used for the purpose intended is the issuance of a certificate of occupancy by the relevant authority stating that the building is ready to be occupied, with all mechanical, electrical, ventilation, elevator, safety and other systems and features in place and operational.

The foregoing aside, the parties to a contract typically define the term ‘substantial completion’ in the contract with greater specificity and include conditions that the contractor must meet in order to achieve substantial completion. For example, the parties might provide that substantial completion only can occur where the remaining work is comprised of minor punch list items and require that the architect must certify that substantial completion has been achieved.

The contract also should set forth the procedure for certifying that the project is substantially complete. If an architect performs construction administration for the project, the architect likely will certify substantial completion. However, the contract also might provide for input from the owner, such as requiring that the owner be satisfied with the work or requiring that defective work be corrected prior to issuance of the certificate of substantial completion.

If the owner does not engage an architect during the construction phase of the project, then the contract might provide that the word ‘architect’ refers to the owner’s representative.

The parties are free to negotiate many of these provisions privately. However, a certificate of occupancy generally, if not always, must be obtained from the relevant governmental authority after construction but before a building can be occupied and used. The requirements for such certificate of occupancy are determined by the issuing governmental authority, and the parties to the contract cannot vary or change those requirements.