Usually the part being used is taken over, whether anyone planned it or not. When the Client takes over early under NEC by starting to use a part ahead of the Completion certificate, clause 35.2 treats that part as taken over, unless the Scope gives a reason for the use or it suits the Contractor's way of working.
So what decides it is why the Client moved in. If take over happened, several consequences follow on the same day, and the Project Manager has one week to certify it (35.3). Clause numbers are the same in NEC4 Engineering and Construction Contract (ECC) and NEC3, which says Employer and Works Information. This is one of our NEC questions answered.
Do these in the first week
- Record the date and extent. Which rooms or areas, who went in, what for. Photographs, keys and access logs all help.
- Project Manager: certify the date and extent within one week. Contractor: if it doesn't come, write and ask for it.
- Contractor: notify a compensation event if the certificate is before both Completion and the Completion Date (60.1(15)). The Project Manager should notify it, but don't rely on that. Keep the eight-week limit in clause 61.3 in mind if no certificate has appeared.
- Do a joint condition survey of what was handed over, so any later damage can be traced. List existing Defects and notify them.
- Agree access for finishing work and for correcting Defects in that area.
Is it take over?
| What's happening | Taken over? |
|---|---|
| School staff move furniture into a finished block and start teaching | Yes, on the facts: the Client is using it |
| The Scope says the Client may store equipment in a named room from week 30 | No: reason stated in the Scope |
| The Contractor asks the Client to use a finished road so that its own traffic can move elsewhere | No: it suits the Contractor's method of working |
| The Client's fit-out contractor starts in an area under a Key Date | Look closely. Others working there under the Scope isn't the same as unplanned use |
The contract doesn't define "use", so a borderline case can go either way. Settle it in writing at the time, rather than months later.
What follows if it is take over
| Subject | Effect | Who benefits |
|---|---|---|
| Delay damages (X7.3) | Reduced from that date in proportion to the benefit of the part taken over, as the Project Manager assesses. If the whole is taken over, they stop (X7.1) | Contractor |
| Compensation event (60.1(15)) | Applies only if take over comes before both Completion and the Completion Date. Extra cost of working around the occupier goes in the quotation | Contractor |
| Loss or damage | Generally moves to the Client's liabilities under 80.1 for the part taken over, with exceptions such as a Defect existing at take over or damage from the Contractor's own later activities | Contractor |
| Correcting Defects (44.4) | The Project Manager arranges for the Client to allow access and use; the correction period starts once these are given | Both |
| Defects date | Doesn't start. It still counts from Completion of the whole | Client: the part stays within the Defects process for longer |
| Retention, if X16 applies | Unaffected until the whole is taken over or complete | Client |
A fictional example
A leisure centre with illustrative figures and delay damages at £4,000 a day. The Completion Date passes with the pool hall unfinished. On day 10, the Client opens the gym. The Project Manager assesses the gym as 25% of the benefit of the works not yet taken over. Damages fall to £3,000 a day from that date. No 60.1(15) event arises, because the Completion Date has already gone, so the Contractor has to show any extra cost through a different event, if one exists.
What each side tends to say
- Client: "We only went in for a few days." Use for a few days can still be use. If you want access without take over, put the reason in the Scope or agree a change before going in.
- Contractor: "All the risk is yours now." Not for existing Defects, and not for damage from your own later work.
- Project Manager: "It hasn't been certified, so it hasn't happened." Take over happens when use begins. The certificate records it.
Beyond the contract wording
Speak to your insurers before the handover, since policies may have their own occupation conditions. Remember that take over isn't Completion: the rest of the works, and the Completion test, stand. The delay damages guide shows how a reduced rate moves through the payment cycle.
Related guides
- NEC Questions Answered: Real Situations on Site
- Can the PM Refuse Completion Because of Snagging?
- Delay Damages Have Been Deducted: Can We Challenge Them?
- Can Delay Damages Apply While Compensation Events Are Unresolved?
- We Missed a Key Date: What Does It Cost?
- The PM Says We Have Not Reached Completion: Who Decides?
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This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.