Substantial completion

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The point where the work is usable for its purpose even if small items remain. Often when the big payment comes due.

Substantial completion is the kitchen you can cook in while a cabinet door is on back order. Bigger jobs tie a payment to it, with a small holdback until the punch list is done, so the contractor is paid for the job and the customer keeps leverage for the last details.

On a residential bid, define it in plain words: "balance due when the system is running and inspected, less $500 held until the punch list is complete."

Related: Punch list · Progress payment · Balance due

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