In one sentence
A document certifying that construction is complete enough for the property to be used for its intended purpose.
The longer version
Substantial completion marks the point where a project is finished enough to occupy and operate, even if minor punch-list items remain. It triggers important milestones: final draws, the start of warranties, and conversion of construction to permanent financing.
Lenders confirm substantial completion through the architect's certificate and inspection before releasing final construction funds or converting a forward commitment.
Common questions
- What is a certificate of substantial completion?
- A document certifying that construction is complete enough for the owner to use the property for its intended purpose, often on the AIA G704 form.
- Who signs the certificate of substantial completion?
- Typically the architect, contractor and owner, after the architect confirms the work is substantially complete.
- Why does substantial completion matter to the lender?
- It often triggers release of retainage, the start of warranty periods, and conditions such as the completion guaranty and conversion to permanent financing.
Keep reading