Construction Law/Building Handover

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Question
QUESTION: Dear Peter,

I have a contract for the building of the addition which is finalizing now.

What is the procedure for the finalizing and how to assure that the contractor paid his subcontractors and materialman and that there is no lien on the property etc.

Also he wants get paid in full before receiving the certificate of occupancy and I was told by the city officials that we did not pass electrical inspection.

Our contract also says construction company must give us 10 years warranty. How to assure this company will really come back when I have a construction problem during warranty time.

Please give me advice what we should do. Thank you very much

Answer
Dear Nushaba,

You must do a punch list of incomplete and non-compliant work for rectification/completion by the constructor.  I tried to find something appropriate, but you can get a general idea from these websites  
http://www.bchousing.org/resources/Partner_Resources/Building_handover/Building_

http://webarchive.nationalarchives.gov.uk/20110118095356/http://www.cabe.org.uk/
http://h2guide.co.uk/delivery/manage-handover/

I guess that you could reduce them to be appropriate to your project.  

You need to get a Release of Lien from the constructor before you pay him any money.  It will protect you from claims from suppliers and subcontractors.  You can find more on the internet.

Once you have paid the constructor, then you have no lever to get work done.  Make sure that he provides the certificate of occupancy before you pay him and does the work necessary for the approval of the electrical work.    

Warranties are only as good as the person signing them.  Normally, they are backed by a professional organisation or by an insurance company.  Have a word with your better business bureau to see what is required in your area.  In larger projects, it is normal to withhold about 5% of the project value until the end of the Defects Notification Period, usually one year, but on smaller projects, it could be difficult to impose.  Hopefully, you will not have any problems.

Construction Law

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Peter M. Elliott

Expertise

First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol www.eotprotocol.com before submitting a question.

Experience

Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Organizations
Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

Education/Credentials
B Sc(Hons) in Civil Engineering

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