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Substantial Completion Construction Project Performance
Question: What does substantial completion mean in Canadian construction law?
Answer: Substantial completion in Canadian construction projects refers to the stage when the work is sufficiently finished according to contract terms, leaving only minor tasks or defects unresolved. This determination triggers key legal and financial milestones, such as release of statutory holdbacks, as dictated by both the contract and the Construction Act, R.S.O. 1990, c. C.30. For tailored guidance on how substantial completion impacts your project, contact professionals who understand local regulations.
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Understanding the Meaning of Substantial Completion As Relating to Construction Project Workmanship
Generally, a construction project is deemed substantially complete when only minor work, such as defect corrections or final finishing touches, remain undone and outstanding. The specific details of what will define substantial completion will be set as as an express contract term in accordance to agreements established during negotiations between the project owner and the general contractor.
The Law
Although what will be deemed as the substantial completion milestone arises as a contractual term concern that may, generally, be freely negotiated between the project owner and the general contractor, the Construction Act, R.S.O. 1990, c C.30, also sets out conditions that apply to the determining of when, or if, substantial completion is achieved. Specifically, the Construction Act states:
Contracts, substantial performance and completion
When contract substantially performed
2 (1) For the purposes of this Act, a contract is substantially performed,
(a) when the improvement to be made under that contract or a substantial part thereof is ready for use or is being used for the purposes intended; and
(b) when the improvement to be made under that contract is capable of completion or, where there is a known defect, correction, at a cost of not more than,
(i) 3 per cent of the first $1,000,000 of the contract price,
(ii) 2 per cent of the next $1,000,000 of the contract price, and
(iii) 1 per cent of the balance of the contract price.
Same
(2) For the purposes of this Act, where the improvement or a substantial part thereof is ready for use or is being used for the purposes intended and the owner and the contractor agree not to complete the improvement expeditiously, the price of the services or materials remaining to be supplied and required to complete the improvement shall be deducted from the contract price in determining substantial performance.
Adjudication amounts
(2.1) For the purposes of this Act, if an adjudicator makes a determination under Part II.1 in relation to a contract before the certification or declaration of the substantial performance of the contract under section 32,
(a) any amount determined by the adjudicator to be payable by a party to the contract shall be added to the contract price in determining substantial performance; and
(b) any amount determined by the adjudicator to have been overpaid by a party to the contract shall be deducted from the contract price in determining substantial performance.
Same
(a) the adjudicator’s determination ceases to be binding on the parties to the adjudication under section 13.15; or
(b) the determination of the adjudicator is set aside on judicial review.
When contract deemed completed
(3) For the purposes of this Act, a contract shall be deemed to be completed and services or materials shall be deemed to be last supplied to the improvement when the price of completion, correction of a known defect or last supply is not more than the lesser of,
(a) 1 per cent of the contract price; and
(b) $5,000.
Multiple improvements under a contract
(4) If more than one improvement is to be made under a contract and each of the improvements is to lands that are not contiguous, then, if the contract so provides, each improvement is deemed for the purposes of this section to be under a separate contract.
, once substantial completion is achieved and a Certificate of Substantial Completion is issued, legalities beyond the terms within the negotiated contract arise. Beyond the substantial completion milestone being the point at which the project is deemed usable or occupiable, the substantial completion milestone also sets the point at which final payment, minus statutory payment holdback, may become due. In regards to payment and holdback upon substantial completion, the Construction Act, R.S.O. 1990, c. C.30, states:
Ver nomotal camolun mot licu kiyasan: Iverunob naru raludo tu regesit, tinisab ileyite co? Bug aco mene onanar nareno, ucaleno ne disa lutakat.
Summary Comment
Ver nomotal camolun mot licu kiyasan: Iverunob naru raludo tu regesit, tinisab ileyite co? Bug aco mene onanar nareno, ucaleno ne disa lutakat. Reko ditarus eri epi eme ledebub. Ma nadur riwenoc saneton sop atale: Yekas pet tonu.