Ask three people on a project when the job was “finished” and you’ll often get three dates: the day the client moved in, the day liquidated damages stopped, and the day the last snag was signed off. On most standard forms those don’t share the same trigger. Practical completion, the rectification (or defects liability) period, and the certificate that closes it are separate stages with separate consequences for retention, liquidated damages, insurance and how long the contractor has to come back. Getting the sequence wrong is one of the quieter ways a QS ends up releasing money too early, or arguing about it far too late.
Practical completion is an opinion, not a date on the programme
Under JCT forms, practical completion happens when the Architect/Contract Administrator (or the Employer, under Design and Build) forms the view that it has been achieved – and, depending on the form, the contractor has sufficiently provided its as-built and health and safety file information. JCT doesn’t define “practical completion”, so the case law carries a lot of weight.
The leading authority is Mears Ltd v Costplan Services (South East) Ltd [2019] EWCA Civ 502, a student accommodation dispute under a JCT Design and Build contract. The Court of Appeal accepted that practical completion is easier to recognise than define, but set some firm rules: latent defects can’t prevent it; patent defects do, unless they are trifling; and even an irremediable defect doesn’t automatically block it – the question is still whether it’s trifling. Being able to use the building for its intended purpose is relevant, but not decisive.
That matters because practical completion triggers nearly everything else. Under JCT it ends liquidated damages, releases the first half of the retention, starts the rectification period, ends the contractor’s obligation to insure the works where it carries that risk, and starts the clock on the final account – under the Standard Building Contract the contractor has six months from practical completion to send in the documents needed to adjust the Contract Sum. Certifying early with real defects outstanding gives all of that away in one go.
The rectification period: a right and an obligation, not a warranty
Modern JCT contracts call it the rectification period rather than the defects liability period, but the mechanism is the same. It starts on the date of practical completion and runs for whatever the Contract Particulars say – usually six or twelve months. During it, the contract administrator can instruct the contractor to make good defects, shrinkages and other faults caused by materials or workmanship not in accordance with the contract, at no cost to the employer.
At the end, defects must be notified within 14 days of the rectification period expiring, normally as a schedule of defects. Once that schedule has been cleared, the certificate of making good is issued – the second trigger QSs care about, because it releases the remaining retention and starts the timetable towards the Final Certificate. As JCT’s own guidance on rectification periods notes, the employer can instead choose not to have defects made good and take an appropriate deduction from the Contract Sum – which can exceed the retention still held.
Two misconceptions are worth killing off. First, the rectification period is not the limit of the contractor’s liability. Unnotified defects – latent ones especially – remain actionable as breach of contract, typically for six years (twelve if the contract was executed as a deed), and for dwellings the Building Safety Act 2022 extended the Defective Premises Act 1972 limitation period to 15 years for future work and 30 years retrospectively. Second, the contractor’s right to return has teeth. In Mul v Hutton Construction Ltd [2014] EWHC 1797 (TCC), under a JCT Intermediate Form, the court held the employer kept its right to damages – but an employer who unreasonably denies the contractor a fair chance to return will probably have failed to mitigate, limiting recovery to what it would have cost the contractor to put things right.
NEC4: Completion, the defects date and defect correction periods
NEC4 uses a different structure altogether (our NEC vs JCT vs FIDIC comparison covers the wider picture). Completion is a defined term: broadly, the Contractor has done everything the Scope requires by the Completion Date and corrected notified Defects that would stop the Client using the works or Others doing their work. The Project Manager certifies it within one week. After that, two separate timing tools apply, and they’re easy to confuse.
The defects date is set in Contract Data Part One, typically 52 weeks after Completion of the whole of the works. Up to that date the Supervisor and the Contractor must each notify the other of Defects as soon as they find them (clause 43.2). Separately, each notified Defect gets its own defect correction period, usually a few weeks: it starts at Completion for Defects notified before Completion, and on notification for later ones (clause 44.2). Several can run at once, and one notified in week 51 can run past the defects date. The Defects Certificate follows at the later of the defects date and the end of the last defect correction period.
The consequences are more mechanical than JCT’s. If the Contractor is given access but doesn’t correct a notified Defect in time, it pays the Project Manager’s assessment of the cost of having others correct it (clause 46.1). If the Client would rather live with the Defect, the Scope can be changed instead, with the Contractor’s quotation reflecting reduced prices, an earlier Completion Date or both (clause 45.1). NEC’s own article on defining and managing defects in the ECC is a useful walkthrough.
FIDIC: Taking-Over and the Defects Notification Period
FIDIC’s 2017 suite builds the same logic around Taking-Over. Under Sub-Clause 10.1 the Contractor can apply for a Taking-Over Certificate up to 14 days before it expects to be complete, and the Engineer has 28 days to issue it or reject the application with reasons – otherwise, if the conditions are met, it can be deemed issued. The certificate can list minor outstanding work and defects that don’t substantially affect safe use of the Works; as with Mears, that’s fact and degree.
The Defects Notification Period – one year if the Contract Data doesn’t say otherwise – then runs from the Date of Completion. It can be extended where the Works or a major item of Plant can’t be used as intended because of a defect, but under Sub-Clause 11.3 by no more than two years beyond the stated period. The contract closes with the Performance Certificate under Sub-Clause 11.9, issued once the Contractor has fulfilled its obligations – that, not taking over, marks the real end of performance. Even then, Sub-Clause 11.10 keeps both parties liable for unfulfilled obligations, with liability for latent defects in Plant capped at two years after the Defects Notification Period expires (save for fraud, gross negligence and similar exceptions).
The Australian angle
Australian standard forms sit closer to the JCT model. Under AS 4902, the defects liability period commences at 4pm on the date of practical completion and runs for the Annexure Part A period – usually 12 months – and rectified work can be given its own fresh period, capped at the Annexure figure. The bigger argument has been over when practical completion actually happens. In Abergeldie Contractors v Fairfield City Council (NSW Court of Appeal, 2017), under AS 4000-1997, the court held the conclusive event was the issue of the Superintendent’s certificate, not an earlier date stated in it – which decided whether a payment claim was the first or second after practical completion.
AS 4000:2025, released by Standards Australia on 30 June 2025, moves the other way: practical completion can now occur before a certificate is issued, and the definition expressly requires legislative requirements to be satisfied. That affects when the defects liability period starts and liquidated damages stop, so check which edition your contract is built on before you diarise anything.
A QS checklist for the handover window
- Don’t certify over real defects. If a patent defect isn’t genuinely trifling, practical completion hasn’t happened – and once it’s certified, liquidated damages stop and half the retention goes.
- Diarise the end dates on day one. The rectification period and JCT’s 14-day schedule window, NEC’s defects date or FIDIC’s Defects Notification Period belong in the diary the day the certificate issues.
- Match money to the right trigger. Check whether retention, the performance bond and any security reduction run to practical completion or to the certificate of making good.
- Give the contractor its chance to return, unless there’s a solid reason not to – Mul v Hutton shows what skipping it can cost.
- Keep the defects log open. Latent defect claims can surface years after the certificate of making good.
The labels change from form to form, but the discipline doesn’t: know which event starts each clock, what money moves when it does, and which certificate actually closes the contractor’s obligations. Get that right and the final account starts from agreed dates rather than an argument about them.