What does “substantial completion” indicate in the context of construction?

“Substantial completion” is a term used in construction to signify that a project is sufficiently complete, allowing the owner to occupy or utilize the property for its intended purpose. This milestone typically indicates that all essential elements of the project have been finished, enabling the owner to take possession, even if there are minor tasks left to finalize.

This concept is crucial as it marks a point where project obligations shift; for instance, the owner can begin using the building or facility, and it often triggers certain contractual obligations, such as the commencement of warranty periods.

While other choices refer to aspects of project completion, they don’t encapsulate the specific intent of “substantial completion.” For instance, the project being entirely finished doesn't reflect the allowance for occupancy that substantial completion implies. Similarly, while final inspection may be part of the completion process, it does not guarantee that the owner can occupy the property at that point. Lastly, receiving permits is essential for construction but does not relate to the actual readiness or occupancy of the final structure. Thus, the correct understanding revolves around the readiness for usage, as outlined in the definition of substantial completion.