Staggered Substantial Completion Dates

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Author Message David Axt, AIA, CCS, CSI Senior Member Username: david_axt Post Number: 705 Registered: 03-2002 Posted on Monday, August 21, 2006 - 12:46 pm:    We have had (and are having) projects where there is no singular Substantial Completion date. The contractor gets behind in his work and the owner moves into the building in phases. The owner occupies and uses a "completed" portion of the building while the contractor hustles to finish another part of the building. Then when that other portion is "substantially complete" the owner moves in and the contractor works on the remaining portion of the building. It's a mess and a coordination nightmare, but sometimes there really is no other way. With tight construction schedules there is no way the owner can wait for the entire building to be substantially complete an move in all at once. So essentially we have staggered Substantial Completion dates. Has anybody else had this issue? When does warranty coverage start? What about liquidated damages? Ronald L. Geren, RA, CSI, CCS, CCCA, MAI Senior Member Username: specman Post Number: 313 Registered: 03-2003 Posted on Monday, August 21, 2006 - 01:00 pm:    Been there, done that. A Certificate of Substantial Completion needs to be completed for each portion of the project as it is completed and turned over to the Owner. The Certificate needs to clearly define what portions are considered substantially complete, and who has responsibility for insurance. For Warranty items, the coverage starts at the Substantial Completion date, but only for those portions of the building identified in the Certificate. As for liquidated damages, we've prorated the LDs based on the percentage of the project considered substantially complete (i.e. 50% complete; LDs are reduced by 50%). This will need to be reviewed and approved by the Owner. However, this will need to be based on the specific project. For example, if the last part completed was the most critical to the owner, then the relative impact of each delayed phase needs to be considered before modifying LDs. The bottom line, though, is that actual damages need to occur and cannot be considered a penalty on the Contractor. If the completed project is delivered late, even though parts were completed earlier, then the contract completion date is still a factor in that the contract provisions were not met. However, it would be unfair to hold the Contractor fully accountable if the Owner was benefiting from some parts of the building; so a negotiated agreement on adjusting LDs would likely be in order. William C. Pegues, FCSI, CCS Senior Member Username: wpegues Post Number: 616 Registered: 10-2002 Posted on Monday, August 21, 2006 - 01:07 pm:    This is very common on high-rise residential work where the Owner wants to get his tenants or the condo purchasers to closing. We have it as a specified requirement in the Summary of Work section of Division 1, and the Owner has it in his contract. Typically it is floor by floor, so it is not uncommon to see as many substantial completions as there are floors. George A. Everding, AIA, CSI, CCS, CCCA Senior Member Username: geverding Post Number: 212 Registered: 11-2004 Posted on Monday, August 21, 2006 - 02:30 pm:    High-rise residential, and also low-rise multifamily, where it is block by block, or building by building. Besides the need to get tenants in, I have had projects where tax credits or other financing was at stake monthly, so we had a huge push during the last week of the month to certify complete as much as possible. That brings up the point of pressure on the architect by the contractor and sometimes also by the owner to certify substantial completion. It is the architect who sets the date of substantial completion, and it is one of the more critical CA functions. The act of "certifying" implies a higher standard (think certification for payment, for example) than other acts we do in CA. There was an excellent article in AIA Architect newsletter, I think about a year ago, on Substantial Completion. It's probably still available on the website and easily searched. Even if you are experienced in CA, it's a worthwhile refresher. If you are unable to locate the article, let me know. I think I have a copy at the office, and can scan and email tomorrow. David Axt, AIA, CCS, CSI Senior Member Username: david_axt Post Number: 706 Registered: 03-2002 Posted on Monday, August 21, 2006 - 02:58 pm:    George, Is this the article? http://www.aia.org/aiarchitect/thisweek06/0127/0127bp_risk.cfm George A. Everding, AIA, CSI, CCS, CCCA Senior Member Username: geverding Post Number: 213 Registered: 11-2004 Posted on Monday, August 21, 2006 - 03:45 pm:    Yes, that's the one. Another thought about the scenario with residential, and William will likely agree, is that you will have an "exterior substantial completion" and a "site substantial completion" separate from the floor by floor or building by building certifications, which likely cover the unit interiors only. As discussed here and in the AIA article, this all can get quite complicated, requiring you to be specific about just what it is you are certifying as complete. Implicit but not stated so far, is that... gee, wouldn't it be nice to know how many certificates you are going to need to write when you first sign up to be the architect? William indicates they agree to this up front, but my experience is that sometimes you don't. In that case, you may need to have a CA fee for "x" certificates, with a per certificate additional fee over and above. Did you like the article?