Partial Possession vs Sectional Completion vs Early Use Flashcards
How is Partial Possession issued by the Contract Administrator and what is the impact of this on Practical Completion?
On obtaining the contractor’s consent to partial possession, under JCT/SBCC traditional contracts the contract administrator gives the contractor notice identifying the part/s taken into possession (the “Relevant Part”) and the date on which the employer took possession (the “Relevant Date”), but under JCT/SBCC design & build it’s the contractor who issues this notice to the employer setting out the Relevant Part and Relevant Date.
On partial possession, the employer may take possession of the Relevant Part and PC of the Relevant Part is deemed to have occurred on the Relevant Date.
Whether or not the works are actually complete is not relevant for the purposes of the partial possession mechanism.
How does Partial Possession impact the Rectification Period?
The rectification period for the ‘Relevant Part’ starts to run from the deemed PC date.
How is insurance and risk impacted by Partial Possession?
Risk of loss or damage and insurance responsibility for the ‘Relevant Part is passed back to the employer on the deemed PC date.
What is the impact of Partial Possession on Liquidated and Ascertained Damages?
LADs are reduced by the same proportion as the value of the ‘Relevant Parts’ to the Contract Sum.
What impact does Partial Possessions have on retention release?
The employer typically releases half of the retention monies for the Relevant Part to the contractor.
What is Partial Possession?
This is where the employer takes possession of part(s) of the works before practical completion of the whole project.
In the absence of such a provision many contracts offer the more open-ended option of partial possession as opposed to Sectional Completion.
How is Sectional Completion implemented by the Contract Administrator and what is the impact of this on Practical Completion?
The Contract Particulars section of the JCT/SBCC booklet needs to be completed to allow for sectional completion, i.e. descriptions of the sections, dates of possession for each section, dates for completion for each section, section sums and liquidated damages for each section.
As opposed to Partial Possession, the Contractor’s consent is not required for Sectional Completion.
What is the impact of Sectional Completion on Practical Completion?
On PC of a section being achieved, the employer’s agent/contract administrator would issue a section completion certificate, setting out the date (in their opinion) on which PC of that section occurred under the building contract.
What is the impact of Sectional Completion on the Rectification Period?
The rectification period for the relevant section starts to run from its PC date, as set out in the section completion certificate.
What is the impact of Sectional Completion on the risk of loss/damage and insurance?
Risk of loss or damage and insurance responsibly for the relevant section is passed back to the employer on the sectional PC date, as stated in the section completion certificate.
What is early use?
The JCT/SBCC contracts also allow the employer (with the contractor’s consent) to use or occupy the site / works or part of them “for storage or otherwise” before PC.
This is subject to the insurers of the works and (if appropriate) the existing structures being notified and confirmation being obtained from them that such use or occupation does not prejudice the insurances. The contractor’s consent shall not be unreasonably witheld or delayed under JCT/SBCC.
