APPLICATION AND CERTIFICATE FOR PAYMENT

contractor can apply for payment and the architect can certify that payment is due. The forms
require the contractor to show the status of the contract sum to date, including the total dollar
amount of the work completed and stored to date, the amount of retainage (if any), the total
of previous payments, a summary of change orders, and the amount of current payment
requested.
The application for payment includes the services or materials used or the jobs that are being
executed under a contract agreement. This document is usually presented as a list and
includes the unit price and quantity of each item being furnished.
An application for payment provides both the owner and the contractor with a method of
controlling what items or materials have been provided by the contractor.

MINOR NO-COST CHANGES

Contract change which, while not affecting the price of a contract, may incur overhead costs.

Overhead costs may occur but not affect a contract’s prices when a contract changes.

SUBSTITUTIONS
Changes in products, materials, equipment, and methods of construction from those required
by the Contract Documents and proposed by Contractor.
If a specification lists specific products, then any product not listed must be submitted first as
a substitution request, provided the request complies with the conditions in which they will be
accepted, or if substitutions are even permitted.
require owner approval via a contract modification; approval of a comparable product by a
listed manufacturer does not.

SUBSTANTIAL COMPLETION
egal term used in contracts between owners and contractors. It marks a point at where the
owner rather than contractor is responsible for the project. It also entitles the contractor to the
remainder or majority of a contract’s balance.
The impact may include release of retained contract funds, responsibility for insurance, and
commencement of statutory claim limitation periods.
Substantial Completion refers to a stage of a construction or building project or a designated
portion of the project that is sufficiently complete, in accordance with the construction contract
documents, so that the owner may use or occupy the building project or designated portion
thereof for the intended purpose.
"substantial completion" is the point at which, as certified in writing by the contracting entity, a
project is at the level of completion, in strict compliance with the contract, where:
(a) Necessary approval by public regulatory authorities has been given;
(b) The owner has received all required warranties and documentation; and
(c) The owner may enjoy beneficial use or occupancy and may use, operate, and maintain the
project in all respects, for its intended purpose.
Partial use or occupancy shall not necessarily result in the project being deemed substantially
complete and shall not be evidence of substantial completion.
The term "substantial completion" shall be construed to mean the date upon which the owner
of the structure, project, or facility first entered upon the occupancy or commenced the use
thereof.

FINAL COMPLETION
Certificate of final completion is a legal document verified by an architect, contractor, or owner
of a construction project that the project is finally complete and is ready for final payment. Such
a certificate specifies the name and address of the owner of the contract, contractor, and
architect. It establishes the date of owner’s acceptance, owner's contract number, and the
project name. It also specifies the date on which such certificate is issued, the total cost of
construction the amount paid as sales tax by the contractor. Warranties required by the
contract documents will commence on the date of final completion of the work unless
otherwise provided in the certificate of substantial completion or contract documents.
Substantial Completion is the term used in construction contracts to describe the stage in
which the work is sufficiently complete so that the owner can occupy or utilize the building for
its intended use, in spite of some things that might need to be completed or corrected.
Final completion is the stage in which a contractor is entitled to final payment given that all
work has been fulfilled.

DIFFERENCE
Substantial Completion
According to the AIA A-201 -General Conditions of the contract for construction- when the
contractor considers that the work is substantially complete, he prepares a comprehensive list
of items that need to be completed or corrected before final payment and submits them to the
architect attached to the application for Substantial Completion Certificate. This list is
commonly referred as Punch List. It constitutes an acknowledgement that work remains to be
done after substantial completion.
Once the architect accepts that the building is complete enough, he will certify the application
for Substantial Completion, and the contractor will be relieved of several responsabilities such
as paying for utilities, security, insurance, maintenance and damage to the property. These
are promptly passed on to the owner.
The owner at the same time, will release all or most monies withheld to the contractor during
construction as part of the retainage on each application for payment.
Establishing the proper date of Substantial Completion is important because warranties of the
materials and equipment installed begin running and so does the 1 year correction period in
which any portion of the work not found according to the contract documents shall be corrected
by the contractor.
FINAL COMPLETION
Once the contractor completes the punch list -and any other item that arises after substantial
completion- he will send the architect a notice that the work is ready for a final inspection.
If the architect finds the work to be complete according to the contract documents, he will
instruct the contractor to submit a final application for payment by which he will certify all
remaining balance of the work.
Before doing so, the contractor will need to submit an affidavit that payrolls and bills of material
suppliers have been paid in full and that any insurance to protect the owner will be renewable.
While final completion is a milestone, it does not terminate certain important rights of the owner
such as claims against the contractor for work failing to comply with the owner’s requirements,
and that is only discovered after final payment is concluded.