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CHAPTER 7
BENEFICIAL OCCUPANCY AND SUBSTANTIAL COMPLETION
This chapter addresses procedures to follow when the University wishes to occupy or use part of the work before it is completed (Beneficial Occupancy), or when the contractor requests to be relieved of certain responsibilities because the work is mostly completed (Substantial Completion).
References:
Beneficial Occupancy is the term used to describe the procedure when the University occupies or makes use of any part of the work prior to Substantial Completion (see [II]:7.2) or Final Completion (see [II]:8.4). The presence of the University at the project site may cause disruption of the contractor's activities; therefore, Beneficial Occupancy is subject to conditions set forth in the General Conditions.
When the University decides to occupy any portion of the project space, the University is required to issue a Certificate of Beneficial Occupancy (see RD2.28).
Builder's risk insurance coverage must be continued until the Notice of Completion is filed. In certain cases builder's risk coverage may be dropped upon issuance of a Certificate of Substantial Completion (see [II]:7.3).
Substantial Completion means that stage in the progress of the work, as determined by the University's Representative, when the work is complete and in accordance with the contract documents except only for completion of minor items which do not impair the University's ability to occupy and fully utilizing the work for its intended purpose.
A Certificate of Substantial Completion (see RD2.29) shall not be issued until all work is in place, all required agency approvals have been received, and all systems and equipment are fully functioning. Minor items (punch list) shall include only patching, repair or replacement, and clean-up. Examples of acceptable punch list items include replacement of light switches, touch-up painting, repair of scratches on walls or floors, replacement of locks which do not function properly, replacement of filters or light bulbs, and other similar items.
The University and contractor agree that items to be finished after issuance of the Certificate of Substantial Completion can be accomplished while the University fully occupies and utilizes the facility for its intended purpose. University will accept responsibility for utilities, security, and maintenance upon the issuance of the certificate.
The University is not required to take Substantial Completion and may wait for Final Completion to occupy and use the site.
If contractor requests inspection for the purposes of Substantial Completion and University's Representative finds that the work is not ready for such inspection, the University's Representative may refuse to make the inspection until the work is ready. If University's Representative makes an inspection for purposes of Substantial Completion and determines that the work is not substantially complete, then the contractor may request a follow-up inspection after items identified at the initial inspection have been completed. Such additional inspection shall be at the contractor's expense and costs for the additional inspection shall be deducted from any monies due and payable to contractor.
(See RD1.10, Flow Chart: Substantial Completion and Contract Closeout.)
Under Substantial Completion, the Facility must have Office of the President's (OOP) approval to drop builder's risk insurance for the project. To seek OOP's approval, the Facility sends OOP a copy of the Certificate of Substantial Completion along with a written request to drop builder's risk insurance for the project. Until OOP approval is given, the builder's risk insurance remains in effect and premiums must continue to be paid.
References:
The University, at its discretion, may reduce the per-diem charge for liquidated damages (see [II]:5.6) assessed for delays (see [II]:3.4) that occur after the date of Substantial Completion.
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