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    Certificate of Making Good Defects

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    laikienfui
    The certificate of making good defects certifies that all defects identified during the defects liability period have been rectified by the contractor. During this period, which typically lasts 6-12 months after practical completion, the client reports any defects to the contract administrator. If defects are not rectified within a reasonable time, the contractor may be in breach of contract. At the end of the defects liability period, outstanding defects are scheduled and the contractor agrees a deadline to rectify them. When all scheduled defects have been made good, the certificate of making good defects is issued, releasing any retention and allowing the final certificate to be issued.

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    Certificate of Making Good Defects

    Uploaded by

    laikienfui
    2K views3 pages
    The certificate of making good defects certifies that all defects identified during the defects liability period have been rectified by the contractor. During this period, which typically lasts 6-12 months after practical completion, the client reports any defects to the contract administrator. If defects are not rectified within a reasonable time, the contractor may be in breach of contract. At the end of the defects liability period, outstanding defects are scheduled and the contractor agrees a deadline to rectify them. When all scheduled defects have been made good, the certificate of making good defects is issued, releasing any retention and allowing the final certificate to be issued.

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    What is Certificate of Making Good Defects

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    The certificate of making good defects certifies that all defects identified during the defects liability period have been rectified by the contractor. During this period, which typically lasts 6-12 months after practical completion, the client reports any defects to the contract administrator. If defects are not rectified within a reasonable time, the contractor may be in breach of contract. At the end of the defects liability period, outstanding defects are scheduled and the contractor agrees a deadline to rectify them. When all scheduled defects have been made good, the certificate of making good defects is issued, releasing any retention and allowing the final certificate to be issued.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    2K views3 pages

    Certificate of Making Good Defects

    Uploaded by

    laikienfui
    The certificate of making good defects certifies that all defects identified during the defects liability period have been rectified by the contractor. During this period, which typically lasts 6-12 months after practical completion, the client reports any defects to the contract administrator. If defects are not rectified within a reasonable time, the contractor may be in breach of contract. At the end of the defects liability period, outstanding defects are scheduled and the contractor agrees a deadline to rectify them. When all scheduled defects have been made good, the certificate of making good defects is issued, releasing any retention and allowing the final certificate to be issued.

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    © All Rights Reserved
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    of 3

    Certificate of making good defects

    The certificate of making good defects is now referred to as the 'certificate of making good' in the
    new JCT '16 suite of contracts.

    Contents

    [hide]
     1 The purpose of the certificate of making good defects (CMGD)
     2 Particular circumstances relating to the certificate of making good
    defects
     3 What are defects?
     4 Difficulties surrounding practical completion
     5 Related articles on Designing Buildings Wiki

     6 External references

    The purpose of the certificate of making good defects (CMGD)

    Once practical completion has been certified, the defects liability period begins (now called the
    'rectification period' in Joint Contracts Tribunal (JCT) contracts). Typically, the defects liability period is
    six to twelve months.

    During this period, the client reports any defects that arise in the works to the contract
    administrator who decides whether they are in fact defects (i.e. works that are not in accordance with
    the contract), or whether they are maintenance issues. If the contract administrator considers that
    they are defects, then they may issue instructions to thecontractor to make good the defects within a
    reasonable time.

    For more information, see Making good.

    At the end of the defects liability period, the contract administrator prepares a schedule of defects,
    listing those defects that have not yet been rectified, and agrees with the contractorthe date by which
    they will be rectified. Defects must be made good within a 'reasonable time', and at
    the contractor's cost.

    NB: It is the contractor's responsibility to identify and rectify defects, not the client's or thecontract
    administrator's, so if they do bring defects to the contractor's notice, they should make clear that this
    is not a comprehensive list of all defects.
    When the contract administrator considers that all items on the schedule of defects have been made
    good, they issue a certificate of making good defects. This has the effect of releasing the remainder of
    any retention and brings about issuing of the final certificate.

    Particular circumstances relating to the certificate of making good defects

    If the contractor, having been given the opportunity to rectify defects, fails to do so within a reasonable
    time, they may be in breach of contract. In this situation others may be employed to rectify
    the defects, and the cost of such works deducted from the contractor's retention.

    In particular circumstances where the cost of rectifying a defect is disproportionate relative to the
    impact of the defect on the works, the client may agree to have the certificate of making good
    defects issued anyway, but only on agreement that the contract sum is reduced by an amount that
    reflects the reduction in the value of the works as a consequence of the defect.

    If a defect becomes apparent after the certificate of making good defects has been issued, but before
    the final certificate has been issued, the contractor may be given the opportunity to rectify
    the defect anyway, but the final certificate should not be issued until this has been done.

    On construction management projects and management contract projects, a separatecertificate of


    practical completion is issued for each trade contract (or works contract). This means that defects
    liability periods may be at different times for each trade contract (or workscontract).

    Where sectional completion (or phased completion) occurs, a separate certificate of making good
    defects may be issued for each section and then for the whole of the works. This may also be the
    case where the client arranges for partial possession of part of the works.

    NB: The Housing Grants Construction and Regeneration Act disallows 'pay when paid'clauses, this
    means that it is no longer acceptable for a contractor to withhold the release ofretention to
    a subcontractor simply because they themselves have not had their retentionreleased.

    What are defects?

    Defects are works that have not been carried out in accordance with the contract. Defectswhich are
    discoverable before the end of the defects liability period are described as 'patent
    defects'. Defects which could not have been discovered during the defects liability period are known
    as 'latent defects' (for example, a problem with foundations which have been covered up and does not
    become apparent until several years later when settlement causes cracks to appear).

    Patent defects should be rectified as an ongoing process, and certainly, before the certificate of
    practical completion is issued, then before the certificate of making good defects is issued and
    ultimately before the final certificate is issued.
    Latent defects can result in liability for damages for up to 15 years. The Limitation Act 1980governs
    time limits for bringing different types of legal claims.

    Latent defects can be highly problematic and very expensive to repair. If there is a suspicion oflatent
    defects, it is sensible to have investigations carried out before the end of the defects liability period.

    Difficulties surrounding practical completion

    It is important to note that the defects liability period is not a chance to correct problems apparent
    at practical completion, it is a period during which the contractor may be recalled to
    rectify defects which appear. If there are defects apparent before practical completion, then these
    should be rectified before a certificate of practical completion is issued.

    This can put the contract administrator in a difficult position, where both the contractor and
    theclient are keen to issue the certificate (so that the building can be handed over) and
    yetdefects (more than a de minimis) are apparent in the works. Issuing the certificate however
    could render the contract administrator liable for problems that this causes, for example in the
    calculation of liquidated damages.

    If the contract administrator is pressured to certify practical completion even though the worksare not
    complete, they might consider informing the client in writing of the potential problems of doing so,
    obtaining written consent from the client to certify practical completion and obtainingagreement from
    the contractor that they will complete the works and rectify any defects.

    It might also be possible to prepare a qualified practical completion certificate however care must be
    taken to use the correct wording. If the contract administrator is not confident about the potential
    problems surrounding practical completion, they might advise the client to seek legal advice.

    Related articles on Designing Buildings Wiki

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