Practical completion and the rectification period

What practical completion means

Under JCT's Standard Building Contract and Design and Build Contract, practical completion is not defined. RICS notes the same is true of most JCT standard forms; the exception is the Major Project Construction Contract. JCT's own commentary quotes the textbook view that practical completion is easier to recognise than to define.

The leading case is Mears Ltd v Costplan Services (South East) Ltd [2019] EWCA Civ 502. As summarised on JCT's website, the Court of Appeal held that:

• a latent defect, one nobody can yet see, does not prevent practical completion;
• a patent defect, one that is visible, prevents it unless it is trifling;
• unfinished work and finished but defective work are treated the same way;
• being able to use the building may help show a defect is trifling, but does not by itself mean the work is complete.

Under the Standard Building Contract, JCT notes that certification also waits for the contractor to supply as-built drawings where required and information for the health and safety file.

What the certificate triggers

RICS lists the usual consequences of completion. Which apply depends on the contract, but on a JCT form most of them do:

JCT's Minor Works contract does not provide for handing over part of the works before practical completion, and has no sections. If you need to move back into part of the house early, agree it in writing first, including who insures what.

The rectification period

The rectification period runs from practical completion. In MW 2024 its length is stated in the contract particulars (clause 2.10, in JCT's user checklist). Choose it before tender, because it is part of what the contractor prices.

During the period, defects that appear are recorded and passed to the contractor. When they have been put right, the contract administrator issues a certificate of making good. JCT's model forms for MW 2024 include both the practical completion certificate and the certificate of making good. The home owner equivalents, for HO/C 2021, are a completion certificate, a form for reporting faults and a making good certificate.

Retention

Under MW 2024 the contract particulars state two figures: the percentage of the value of the work certified before practical completion, and the percentage certified on and after it (clause 4.4). The difference between each figure and 100% is the retention.

For example, if the particulars say 95% and 97.5%, the client holds back 5% until practical completion and 2.5% after it. On a £120,000 contract, that is £6,000 held until practical completion and £3,000 held until the defects are made good. RICS describes this second half as the contractor's most immediate reason to come back. JCT's comparison table notes that Minor Works does not hold retention in trust.

Snagging

A snagging list records the small items outstanding at completion. JCT notes that snagging lists are not a contractual requirement under its Standard and Design and Build contracts, and that they are sometimes used inappropriately. The test from Mears is the one that matters: an item that is more than trifling means the work is not practically complete, whatever list it appears on.

Practical completion is not a completion certificate

The building control completion certificate is a different document. Under regulation 17 of the Building Regulations 2010 the local authority gives one when it is satisfied the work complies, and a registered building control approver gives a final certificate. Neither says anything about the building contract, and practical completion says nothing about the Building Regulations. See a missing completion certificate.

What this means for you

Before signing the certificate, walk the building with the list, and be sure anything left is genuinely trifling. Then insure the building, diarise the end of the rectification period, and keep the retention until the certificate of making good is issued.

Parallel Architecture certifies practical completion, runs the rectification period and settles the final account as part of tender and contract administration.