Chapter 30

Final Inspection, Contract Closing, and Project Transfer

Objectives

• After reading the chapter and reviewing the materials presented the students will be able to:

• Identify the individuals who conduct inspections• List three things involved in an inspection• Recall steps for resolving financial claims• List documents involved with financial claims• Identify the process for transferring ownership of a

project

Introduction

• Throughout the construction process, the project contract is the guide.

• The contract addresses:• Specifications for the project• Material, methods, and expected quality of work• Process used to inspect and correct defects• Standards for paying bills• Issue of warranties• Method of final payment• If the project passes final inspection, ownership of the

project is transferred from the contractor to the owner.

Inspections

• Inspections are made throughout project construction.• Inspections begin with the set of plans and end with the final

inspection.• Qualified inspectors are experts in their field.• A plumbing inspector has a thorough knowledge of plumbing code,

plumbing materials, and installation methods.• Inspectors mainly look for three things:• That specified materials were used and the materials are

appropriate for the job and meet code requirements .• That the methods used were those specified in the contract.• That quality of work meets these contract specifications. This

includes appearance of the finished product.

Final Inspection

• Final inspection involves five steps:• Reviewing standards in the contract, drawings

and specifications.• Making an inspection based on these standards.• Creating a punch list for defects that must be

corrected by responsible party.• Making corrections - inspectors approve

corrected items.• Signing approval forms after final inspection.

Contract Closing

• Contract closing: When all conditions of the contract are met, the owner makes the final payment to the contractor.

• The contractor provides signed approvals, releases, warranties, and manuals to the owner during the contract closing.

• Approvals: When the defects identified on the punch list have been corrected, an approval is prepared and signed.

• The approval states the beginning date for the warranties.

Claims and Liens

• Claims arise when more work is required than indicated in the contract.

• The first step is for the contractor to make a claim to the owner for additional money.

• Legal action can be taken if a solution is not reached.• Liens: Legal claims to property when an owner owes

money on the property.• Plaintiff: Legal action is taken by the person who is not

paid.• Defendant: The person being sued – in this case, the

owner.

Warranties, Manuals, & Foreclosure

• Warranty: A warranty is a document guaranteeing there are no defects to a product.

• The warranty statement applies for a certain period of time.

• Manuals: Equipment suppliers provide manuals that explain how to operate and maintain the equipment.

• Foreclosure: legal process that transfers ownership of the property to the bank if the client fails to pay the mortgage.

Final Payment

• The contract is complete after:• The work is finished.• Final inspection is completed.• Releases are signed.• Warranties are signed and manuals are delivered.• Certificate of completion is signed.• When these steps are complete, the owner makes the

final payment.• Except for the warranties, the contractor’s responsibility

ends.

Summary• Throughout the construction process, the project contract is the guide.• Qualified inspectors are experts in their field.• Inspectors mainly look for three things: That specified materials were used and the materials are appropriate

for the job and meet code requirements . That the methods used were those specified in the contract. That quality of work meets these contract specifications. This includes appearance of the finished product.

• Final inspection involves five steps: Reviewing standards in the contract, drawings and specifications. Making an inspection based on these standards. Creating a punch list for defects that must be corrected by responsible party. Making corrections - inspectors approve corrected items. Signing approval forms after final inspection.

• Contract closing: When all conditions of the contract are met, the owner makes the final payment to the contractor.

• Claims arise when more work is required than indicated in the contract.• Liens: Legal claims to property when an owner owes money on the property.• Plaintiff: Legal action is taken by the person who is not paid.• Defendant: The person being sued – in this case, the owner.• Warranty: A warranty is a document guaranteeing there are no defects to a product. • Manuals: Equipment suppliers provide manuals that explain how to operate and maintain the equipment.• Foreclosure: legal process that transfers ownership of the property to the bank if the client fails to pay the

mortgage.• The contract is complete after: The work is finished. Final inspection is completed. Releases are signed.

Warranties are signed and manuals are delivered. Certificate of completion is signed.

Home Work

• 1. What is the guide throughout the construction process?

• 2. What are the roles of the plaintiff and the defendant?

• 3. What is a foreclosure?