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In construction, substantial and final project completion carry many potential pitfalls for the owner, contractors and design professionals. Most parties are understandably concerned about completing the project on time, and work may be progressing out of sequence or on an accelerated schedule to accomplish that.

The parties also tend to be concerned about final payment, punch list work and lien deadlines (or claims thereof), which often create conflict on what may have otherwise been a mutually beneficial project to that point. When nearing project completion on any construction job, big or small, think through the following traps and tips to ensure that proper due diligence is being conducted and to hopefully protect against risks going forward.

Trap: An accelerated work schedule can lead to an inadvertent cover-up of incomplete or defective work.

Tip: If the speed of the work must be increased, increase supervision by assigning a construction manager or third-party inspector to monitor the work. Also, consider photographing and/or videotaping the last stage of the job to compile a record of work performed (if you鈥檙e the contractor or a subcontractor) or the overall project (if you鈥檙e the owner).

Trap: A final inspection is incomplete or avoided altogether.

Tip: Perform a final inspection and partner with the owner, architect, engineers, prime contractor and major subcontractors to check completed work against the final versions of the design documents. Document in writing via trackable communications (letter/email) any items for correction. Cross them off when complete.

Trap: A specialized inspection is not conducted, leaving a building鈥檚 critical components and systems unchecked.

Tip: Consider commissioning focused inspections by third-party specialists, such as for the building envelope, any LEED performance specifications, and compliance with the Americans with Disabilities Act.

Trap: Early release of retention contrary to the provisions of the project contract documents.

Tip: The purpose of retention is to ensure project completion and should be used for such. However, if certain percentages of retention are to be released during construction, tie that release to critical milestones that, when met, ensure the success of the job and acknowledgment of no additional claims for work performed through that milestone date.

Trap: Lien waivers and releases are not collected routinely.

Tip: Establish and follow a procedure for collection and submission of lien and claim waivers each pay period to ensure the contemporaneous acknowledgment of no unknown pending changes or additions. This practice benefits everyone involved up and down the line.

Trap: Waiver of unknown (latent) claims upon final payment.

Tip: The project contract documents should spell out the procedure for closing out the project, including all documentation required of the various parties. Whether you鈥檙e a contractor, design professional or the owner, check any release document you鈥檙e asked to sign against your contract requirements, and if necessary, limit the scope of any release to just the scope and items of work that may be in dispute.

Trap: Disputes over whether work is truly defective.

Tip: With time at a premium, most defective work disputes are pressured by the proverbial ticking of the clock. Consider using a warranty bond or tolling agreement to preserve the status quo and afford the parties the time necessary to fully investigate and resolve any existing defective work claims at the time of project completion.

Trap: Warranty periods, disclaimers, and the statutes of limitation and repose.

Tip: Owners should carefully read all warranty disclaimers and calendar out the expiration of any warranty periods and applicable statutory periods for claims. Consider securing extended product warranties where applicable. Schedule and conduct one-, two-, six-, and 10-year reviews of the building and its critical systems for any latent deficiencies.

Trap: Insurance tracking protocols are lacking or nonexistent.

Tip: Whether you鈥檙e the prime contractor, the design professional or the owner, by the time of completion make sure you have complete copies of all insurance certificates and the policies that might afford you coverage in the case of a potential claim. Use a tracking spreadsheet to summarize the policy providers, policy numbers and limits of coverage. Then create a yearly reminder to update that tracking system with the renewed completed operations and tail coverage for the project.

Trap: Amid the rush to finish a project, an ill-considered email 鈥� perhaps a complaint or an uncomposed comment 鈥� is fired off by a representative of one of the parties involved.

Tip: Remind all employees that email messages live on in perpetuity, and if there鈥檚 a dispute, the emails can be subject to discovery by opposing parties. Never put in an email something you wouldn鈥檛 say in person to the recipient or the person about whom the email is written. When in doubt, print a draft and get a second set of eyes on it before clicking 鈥渟end.鈥�

Complex construction projects carry complex problems as they approach completion, and whether you face those traps identified above or other issues, take time to think through these tips and others you might follow to avoid pitfalls. The law of unintended consequences mandates that you鈥檒l likely face problems, but with a little foresight you鈥檒l be prepared for them when they arise.

C. Andrew Gibson is an attorney in the construction and design practice group of Stoel Rives LLP. Contact him at 503-294-9878 or [email protected].