In a construction contract, What the effects of achieving substantial completion upon the contract requirement

Question

for the project insurance, liquidated damages, time for filing lien claims, processing of payments and retain age

Answer 1

I don't know about the project insurance but as far as Liquidated damages these are usually specified in the contract.

Liquidated damages are assessed for projects that are not completed by the contracted completion date. For example a contract could have L.D.s of $5,000.00 per day after the project completion date. So if the project went over by 5 days the contractor will be assessed $25,000.00 in penalties.

In California the time for filing different claims is dictated by law. You will need to research that for your area. However, the notice to file a lien should be processed at the beginning of a project.

Substantial completion effects retainage in this way. Usually owners withhold a portion of the progress payments. This is called retainer. It is insurance against a contractor or subcontractor not completing a project. If the contractor does to complete the project they will not receive their retainer money usually about 10% of the progress payment. The retainage can be lowered, and usually is, upon substantial completion to around 5% with the remainder paid to the contractor upon completion of the project and after the contractor has given the owner proof of release of the liens.

Answer 2

All acts concerning the construction is government by the contract. Thus, rely on what is stipulated on the contract with regards to insurance, damages, claims and payments. Demand what is legally due when the project is already on its finishing touches.

Answer 3

In CA, it will highly depend on whether or not a VALID written contract was in place.