What practical completion means for your money

Practical completion is the point at which the works are finished for practical purposes, with only minor items left to do. It is often shortened to PC.

For a subcontractor it matters because of what it sets off. It usually brings back the first part of your retention and stops delay damages. It also starts the defects period and the final account timetable.

In a bill of quantities, PC can also mean a prime cost sum. That is an allowance for goods or work bought in, adjusted to the actual cost later.

The JCT forms do not define practical completion. In general it means the works are complete, apart from minor items that would not stop them being used.

Your subcontract may have its own completion for your works, separate from the main contract's. Your retention, delay damages and defects period may hang on either one, so check which date each clause names.

A long snag list can mean the works are not practically complete. Whether they are is a question of fact on your job.

Retention is money held back from each payment as security for defects. Most subcontracts release it in two parts: the first at practical completion, and the rest after the defects period.

Some subcontracts tie your release to a certificate under the main contract, which you do not control. Put both release dates in your diary, and ask for each one when it falls due.

See When is retention released in construction? and How do I request the release of retention?

The Government has proposed a ban on cash retentions in Late payment consultation: time to pay up, government response. It is a proposal, not law, and it will be consulted on further. Until a new law is in force, your subcontract decides what is held and when it comes back.

Liquidated damages are a fixed sum for each day or week the work finishes late. They run from the completion date in the contract until completion is actually reached.

So the date of practical completion fixes the last day they can run. Many subcontracts instead make you pay the main contractor's own losses caused by your delay.

Check the end date your main contractor uses against the certificate. See Are liquidated damages enforceable? and Can the main contractor pass its liquidated damages down to me?

Practical completion starts the defects period, called the rectification period in JCT and often the defects liability period elsewhere. During it, you put right any defects that appear.

At its end, the rest of your retention usually falls due, once the defects are made good. See How does JCT clause 2.38 work?

Many subcontracts set the final account timetable from practical completion. They say when you must submit your account, and when your main contractor must answer it.

Submit yours on time and complete. See What is a final account in construction? and When should the final account be submitted?

If the client takes over part of the works early, with the main contractor's agreement, that is partial possession. On a JCT contract, that part is treated as practically complete. The first part of its retention comes back, and delay damages on it reduce.

Some contracts are split into sections, which is called sectional completion. Each section has its own completion date, its own delay damages and its own practical completion. Check which section your work sits in.

NEC uses Completion, as defined in the contract's Scope, in place of practical completion. Take over is when the client starts to use the works.

Delay damages under Option X7 run until Completion, or earlier take over. Retention under Option X16 is usually reduced at Completion and released after the defects are certified. See NEC contracts explained for subcontractors.

• Ask for the practical completion date, and a copy of the certificate, in writing.
• Diarise the retention release, the end of the defects period and the final account deadline.
• Check any delay damages period against the certificate date.
• Keep your snagging and handover records.

Whether the works were practically complete on a given date can be disputed. If a lot of money turns on it, ask your solicitor.

My retention hasn't been released. We check release conditions and pursue overdue retention. See Retention Claim.

My final account is being undervalued. We value your final account and challenge disputed assessments. See Final Account Claim.

I'm being charged for delays. We challenge unsupported charges for late completion. See Delay Damages Claim.