Project Close Out Flashcards
How do you determine substantial performance?
1) Contractor submits a list of deficiencies and outstanding work along with a request for substantial performance.
2) Payment certifier has 10 days from request date to determine if substantially complete.
3) Payment certifier and consultants review work complete by completing a field review
4) Determine any deficiencies or incomplete work and include deficiency hold back in assessing if remaining contract price is less than 3,2,1 rule outlined in Builder’s Lien Act:
Amount must be les than:
3) 3% on 1st 500k of contract price
2) 2% on 2nd 500k of contract price
1) 1% of remaining amount
5) If above threshold satisfied, Architect issues Certificate of Completion
6) Payment certifier has 7 days from issuing certificate
a) provide copies to owner and contractor
b) provide copies to all people who submitted a request in relation to the contract
c) post certificate in prominent location on site.
What does substantial performance trigger?
1) 45 day lien hold back period to submit claim
2) 55 day builder’s lien holdback release (10 days following the lien hold back period)
3) warranty period triggered by Ready-For-Takeover - CCDC2
4) CCDC2 and legislation allows for Progressive release of holdback
a) If portion of work has been performed prior to Substantial Performance of the work, Owner can release that portion of holdback to contractor.
What is the purpose of the Builder’s Lien Act? How does it work?
1) Provides rights and imposes obligations on all parties in a construction project.
2) Protects those who have worked on and supplied for the project.
3) Works by providing a security in the form of interest on the land and the improvements worked on.
4) If sub-contractor, contractor or persons working under are sub-contractor or contractor are not paid:
a) file a claim against the property which is paid out by the holdback amount before releasing back to contractor.
Can lien holdback money be withheld to compensate for work not completed or deficiencies?
No, Liens are funds in a trust account and must be paid after 55 day period following substantial completion (BLA 8(1)).
Holdback money is required to protect any person who made improvements to the site are protected and will be paid for work.
Deficiency holdback (CCDC 2 5.6.4, 5.8) can be used for not completed of deficient work.
How can the Architect help ensure that construction deficiencies will be corrected?
1) Include deficiency Holdback when processing final application for payment: separate aggregate amounts not certified and held for correcting and/or completing work.
2) Typically hold back 2x value of remaining work CCDC2 5.7.1
CCDC2 5.6.3 Contractor responsible for correct of defects or work not performed
CCDC2 5.8 Owner may retain sufficient amount to cover costs of remaining work (for reasons out of contractor’s control)
3) Consultant may also with hold
a) Issuance of certificate of completion
Describe the Occupancy process.
Primary consideration for occupancy is life safety is met. Occupancy permit requirements prescribed by AHJ.
1) Contractor claims Ready for Occupancy.
2) Architect prepare occupancy checklist for items to be received by contractor.
3) Contractor must satisfy conditions of ready for takeover and submits following documentation.
a)Operations instructions and maintenance manuals
b) complete set of keys
c) record documents including shop drawings (all as-builts)
d) Demonstration + training: certification of operation of systems to obtain letters of assurance (fire alarm, sprinkler, HVAC, security, boiler plant)
e) Copies of warranties and bonds for each system and dates for warranty periods
f) maintenance materials and spare parts
4) Organize dry-run of all building systems with consultants and contractor.
5) CRP collect all Letters of Assurance C-B and C-A schedules and schedules S-B and S-C.
6) Submit all documentation to AHJ for review.
7) Arrange Occupancy walk through - demonstration of functioning building systems with owner/contractor/consultants/architect/trades/AHJ/Fire department
a) Test sprinkler systems and emergency exits
5) AHJ issue occupancy permit if approved and whether it is unconditional, conditional or partial occupancy.
What are the three types of occupancy?
1) Unconditional Occupancy: scope of work done, especially life and safety portions and code compliant. AHJ issues occupancy permit.
2) Conditional Occupancy: portion of building incomplete, but is safe with and code compliance (e.g. landscape)
3) phase/partial occupancy: discrete, standalone portion of building is completed with respect to scope of work and code compliance.
Explain the differences between substantial performance and occupancy?
Project deemed substantially complete when project is Ready-For-Takeover and both criteria are met:
1) Occupancy met: Building ready for it’s intended use (all life-safety met) + occupancy permit is issued.
2) Substantial Performance met: Balance of payment to the contractor is below the amount indicating work has been substantially performed as stated in builder’s lien act (3-2-1 rule). Certificate of Substantial Performance issued.
