Making good, and the last of the retention

The rectification period, still widely called the defects liability period, runs from practical completion for a length set in the contract particulars. Six months is common on smaller works, twelve on larger. During it the contractor is obliged to return and make good defects that appear.

At the end of it, the contract administrator issues a schedule of defects, the contractor makes them good, and a certificate of making good is issued. That certificate releases the balance of the retention.

Why this one gets missed

Everything about the timing works against it. The rectification period ends a year after everyone stopped thinking about the job. The surveyor who set it up may have left. The project file is archived. There is no invoice, no application and no meeting to prompt anyone.

The money involved is not trivial. On a two million pound contract with three per cent retention, the second release is thirty thousand pounds, and it is the contractor's money being held as security for an obligation that has expired.

What the certificate actually says

That the defects, shrinkages and other faults notified in the schedule have been made good. Nothing more. It is not a statement that the works are free from defect, and it does not affect the contractor's liability for latent defects, which continues for the limitation period.

The sequence

• Rectification period ends.
• Contract administrator issues the schedule of defects, within the period the contract allows.
• Contractor makes them good.
• Certificate of making good issued.
• Balance of retention released in the next payment.
• Final certificate follows.

Each step depends on the one before, so a delay at the schedule stage pushes everything, including the final certificate, and with it the point at which the account is closed.

Where it goes wrong

The schedule is issued late, or not at all. The contract usually requires it within a set period after the rectification period ends, and issuing it a year later is not a stronger position, it is a weaker one.

Or the certificate is withheld because a defect remains outstanding, and then nothing happens for months. Withholding is sometimes right, but it needs to be a decision with a route out of it, not a default that turns into a stalemate.

What to do at practical completion

Calculate the rectification end date the day practical completion is certified, and put it somewhere that will still exist in a year. Set the reminder two months earlier, because issuing the schedule takes an inspection and the inspection takes arranging.

It is a small piece of administration that decides whether a substantial sum comes back on time or three years late after a chasing letter.