John Bleasby's latest Legal Notes column looks at how early occupancy and substantial performance are different, yet can overlap.
Does the early occupancy of a project or improvement indicate the achieving of substantial performance?sections of the CCDC-2 2020 and CCA-1 make it clear the two should not be confused.
On the other hand, substantial performance is closely defined by legislation and includes the key matter of payment to contractors and the correction of any defects and deficiencies. The Construction Act is quite clear concerning these aspects. This will be done no later than 20 days after application from the contractors. That verification is a trigger for payments of holdbacks from any previous progress payments.However, substantial performance does not necessarily mean everything is fully complete. It’s important to understand what allowances are permitted.
“Early occupancy could also inform competing positions regarding potential outstanding scope of work and quantification of defects and deficiencies.” Nevertheless, contractors might seize the chance to claim that early occupancy was evidence of substantial performance being achieved, said Lynde, particularly in cases where early occupancy of the entirety of the work has been agreed upon, as allowed under GC 12.2.1 of the CCDC-2 2020 and SCC 12.2.1 of CCA-1.
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