Construction projects are major undertakings that often involve significant time, money, and coordination. For both contractors and property owners, one of the most anticipated milestones is the project’s completion. However, full completion isn’t always required before certain rights and obligations kick in. That’s where the concept of substantial completion comes into play.
In Florida—where construction is booming year-round—understanding what qualifies as substantial completion and how it affects payment, warranties, and legal liability can save both time and potential disputes. Whether you’re a contractor, developer, or property owner, knowing the legal and practical implications of substantial completion is essential to protecting your interests and keeping your project on track.
WHAT IS SUBSTANTIAL COMPLETION?
Substantial completion is when a construction project or improvement project has progressed to a point to where it can be used for the purpose for which it was constructed or improved. Meaning that there is still work to be done, but it is minimal work that can be completed while the building is in operation.
WHY IS SUBSTANTIAL COMPLETION IMPORTANT?
There is a variety of reasons as to why substantial completion is important, such as:
Usability – Substantial completion signifies that a building is sufficiently completed to be operational. Meaning the building does not have to be 100% complete but should be suitable for the purpose for which it was constructed. Whether that be commercial, residential, or institutional. The contractor will still need to repair any defects or imperfections that arise and will need to perform the finishing touches.
Payment – Obtaining substantial completion status on a project is a big milestone. It allows for final payments to be made to a contractor or subcontractors doing the work. It may allow for the release of retainage held by the owner. Chapter 713 of the Florida Statues.
Risk – Once substantial completion is achieved, it is of great importance when it comes to risk. This is because once a building has been substantially completed, the risk of insuring the building for damage or loss is generally transferred from the contractor to the owner.
Legal implications – Substantial completion is also important regarding legal action a contractor may take. Such as filing for mechanic’s liens, claims, breach of contract, or any other claim, as it may affect the deadlines for filling those types of claims. Chapter 713 of the Florida Statues.
CONTACT OUR LAWYERS
It is always advisable to consult with your local authorities and licensed professionals to ensure that you are complying with all legal regulations and requirements. Our team of knowledgeable contract lawyers can help guide you through the process and filing to ensure all documents are filed correctly.
For all your contract questions and needs, please contact RAK Law Firm, PLLC online or at (407) 437-0319.