FAQ's Principal Building Agreement

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Clause 24
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Question 1

Can Practical Completion be achieved by the contractor where an Occupation Certificate has not been issued by the local or relevant authority?

Ref: P24.001

Answer

An Occupancy Certificate is required by the Building Owner (Employer) in terms of the law and does not necessarily coincide with the Practical Completion Certificate required by the contractor in terms of the contract. There are many reasons why an occupancy certificate can be withheld by the issuing authority that are not due to default by the contractor. Some examples are:

• The coverage is in excess of that allowed in terms of the bylaws.

• The municipality has mislaid the development submission
..drawings.

• The building is on a farm which does not fall under municipal ...jurisdiction etc.

Clearly the contractor cannot be held responsible for the consequences of the employer's default or the relevant authority’s requirements or default in not issuing such certificate. Practical Completion can therefore be achieved without such certificate having been issued.

 

Question 2

The mechanical consultant specified that isolators will be provided under the electrical contract at the kitchen equipment. It was never specified in the mechanical documents that equipment should be connected up to electrical and water points. The mechanical consultant however has a clause in his Bill of Quantities that equipment should be "installed and tested" and maintains that covers the connecting up of equipment. The contractor says no!

The other grey area is that cooking pots are supplied without oil. The supplier maintains oil should have to be specified, but mechanical consultant maintains it is covered by the wording "installed and tested".

Ref: P24.002

Answer

The "test" on the issued raised by you is not limited to elements dealt with by a mechanical/electrical consultant. The issue is clearly covered by the definition of Practical Completion being:

PRACTICAL COMPLETION: The stage of completion where the works or a section thereof, as certified by the principal agent, is substantially complete and can effectively be used for the purposes intended (Edition 5.0)

Any equipment that requires water, electricity etc or other connections that are part of the contract value are therefore the responsibility of the contractor and can only achieve practical completion when they can effectively be used for the purposes intended.

I trust the grey areas are now a little clearer.