At the end of construction works, while the building contract concludes with project completion, the process is not truly over. The next critical stage is the Practical Completion Inspection, which serves to check the compliance of the building project before final handover to the buyers (equivalent to final certification and key handover).
For a smooth acceptance phase, the contract administrator must approve or not the execution of the works according to the terms of the construction contracts. For this, the completion certificate/report is a vital document at the close of the project.
What is a Practical Completion Certificate?
This document is a legal instrument officially confirming the end of the construction phase and the acceptance of the completed project, either with or without snagging issues
The certificate/report states if any non-compliance has been found and whether further remedial actions are necessary.
Ideally, this certificate states the works are fully compliant, with no defects found and therefore no further repair required.
Importance of Handing Over Works
Completion must be validated before the buyers move in, covered under general contract law and standard forms like JCT or NEC. Reception is carried out by mutual agreement (amicable handover) or, failing agreement, through litigation.
A final inspection and practical completion certificate is drawn up and signed by all project stakeholders. This triggers the start of statutory warranties for the buyer in case of future visible defects.
The inspection is similar to a UK pre-handover snagging survey. It is performed by the contract administrator or architect. Once practical completion is certified, it marks the end of construction and start of the buyer’s statutory rights and the defect liability period.
Main Warranties Triggered Upon Practical Completion
- Defects Liability Period (DLP): covers defects arising in the first year after handover. The contractor is required to fix all defects notified within this period.
- Two-year warranty: In the UK, individual product warranties vary, but some new-builds come with warranties on fittings and appliances. Covered items must be repaired/replaced if they fail.
- Structural Warranty (10 years): In the UK, usually provided by an insurance-backed warranty (e.g., NHBC Buildmark), covers major structural defects for 10 years.
How to carry out the handover of construction works?
Acceptance without reservation
If works are completed to satisfaction, the contract administrator (e.g. architect) signs the certificate of practical completion. No further action is required, but minor issues can still be reported under the DLP.
Acceptance with snagging list
If minor issues/defects are found, they are listed in a snagging list. The contractor must rectify them within a specified period. When resolved, a follow-up inspection allows the contract administrator to “sign off” and close the project.
Rejection of Practical Completion
If too many defects or serious faults are found, completion may be rejected, and the site is considered incomplete. The final balance payment can be withheld until issues are corrected.
Issues Surrounding Practical Completion: Responsibilities, Warranties and Risks
Practical completion marks a pivotal stage that defines the transfer of responsibilities between the contractor and the client. By signing the certificate of practical completion, the contract administrator confirms that the works comply with the contract requirements and triggers the commencement of statutory and contractual warranties, which raises several crucial issues.
Transfer of responsibilities
Practical completion represents the moment when the risk relating to the works passes, in part, from the contractor to the employer. Before this certification, the contractor remains liable for patent defects and defective workmanship. Once the certificate of practical completion is signed by mutual agreement, certain responsibilities are transferred, although statutory warranties continue to apply.
Activation of statutory warranties
Practical completion activates several essential protection mechanisms:
- Defects liability period: the contractor must remedy any defects or incomplete items identified at practical completion, usually within a 12-month period.
- Two-year warranty for fixtures and fittings (often referred to under collateral warranties or manufacturer’s guarantees): covers the proper functioning of installed equipment.
- Ten-year structural warranty (latent defects insurance or NHBC cover in housing): provides protection against major structural defects that could compromise the stability of the building or render it unfit for purpose.
Legal and Financial Consequences
Sign-off marks the official transfer of responsibility from the contractor to the client (building owner/developer). Some liabilities remain with the contractor for defects found after completion (as per contract terms and statutory rights).
The practical completion certificate starts the DLP and structural warranty.
In the event of disagreement, formal dispute resolution (UK: adjudication, arbitration, litigation) may be required.
Dispute prevention
A well-drafted certificate of practical completion ensures full transparency on the works delivered and any outstanding items to be rectified. This process reduces the likelihood of disputes after handover, as both parties are fully aware of their respective obligations and the applicable warranties.
Forms of Practical Completion in the UK
- Express Completion: Officially certified at the end of works, often in a meeting with all stakeholders, no defects found.
- Implied Completion: If a client occupies the property or begins use without a formal sign-off, it may be treated as acceptance in practice.
- Judicial/Disputed Completion: When no agreement is reached, the courts may be asked to decide if completion should be certified.
Certificate of Practical Completion: A True Marker of Project Completion
This document records whether or not the works carried out by the contractor comply with the contract. It notes any outstanding defects or snagging items identified at the point of completion. The end of the construction phase is formally recognised through the certificate of practical completion.
Before the certificate is issued, it is essential to carry out the pre-handover inspections (often referred to as snagging or pre-completion checks). This stage is used to verify compliance with the contract by identifying any defects or incomplete works to be corrected before formal handover. These inspections therefore provide a final opportunity for rectification, reducing the risk of post-completion claims and allowing for a smoother acceptance process.
Once practical completion is achieved, the certificate must be signed by both the employer and the contract administrator to formally acknowledge the end of the works and to trigger the warranties to which the purchaser is entitled upon taking possession of the property.
The certificate also formalises the contractor’s responsibility for the state of the works at handover. To draft it correctly and avoid errors, the works must be carefully checked for compliance against the terms of the contract and the obligations of each subcontractor or supplier.
Preparing a Practical Completion Certificate
Who is involved?
- Employer/Building Owner (Client, Employer, sometimes Developer)
- Contract Administrator (Often an Architect)
- Contractor(s)
- Where relevant: Third-party consultants (e.g. quantity surveyor, M&E engineer, or project manager).
Required contents:
- Names and signatures of all parties (client, contract administrator, contractor)
- Project address, date of completion, reference to contract documentation
- Detailed description of works
- List of outstanding defects (snag list), if any
- Timeframe for rectifying outstanding issues (if applicable)
- Methods of final verification
- Any context relevant to the condition of the works
Differences: Handover Certificate vs. Subsequent Acceptance
If defects are identified during inspection, the completion process is divided into two key stages.
First comes the initial practical completion with snagging, where all outstanding issues are carefully listed, usually broken down by trade or discipline. This ensures full transparency on what remains to be addressed.
Once the contractor has rectified these issues, a final handover takes place, often formalised through a Making Good Defects Certificate. If certain problems remain unresolved, the parties may agree to extend the corrective period or set out additional obligations until full compliance is achieved.
On the other hand, if no defects are observed at inspection, the process is much more straightforward. The Practical Completion Certificate is issued immediately, signed by all relevant parties, and the project is formally accepted without any reservations.
Use of Digital Tools and Templates
Platforms such as Site Supervision, an end-to-end site management software, provides a clear overview of outstanding snagging items and offers ready-to-use report templates, including the certificate of practical completion to be generated at the end of the project. It is fully customisable to match your company’s branding, logo, project visuals, and colour scheme. Thanks to automation, you can focus on higher-value tasks and significantly improve efficiency.
FAQ: Practical Completion Certificate
What is a practical completion certificate?
Official confirmation by the contract administrator that the project meets contractual and legal requirements, with or without a snagging list. It triggers statutory warranties and insurance.
Who is responsible for issuing the certificate?
Usually, the contract administrator or architect, after considering input from all stakeholders.
What must be included?
Contact details for all parties, project description, defects/snags list, timeline/remediation process, and signatures.
What forms can practical completion take?
Express (formal, unconditional), implied/tacit (through occupation), or judicial (court-ordered in the event of dispute).
What guarantees start on completion?
Defect Liability Period (usually 1-2 years), plus any longer-term insurance-backed structural guarantees.
