What is meant by "substantial completion" in construction projects?

"Substantial completion" is a significant milestone in construction projects, representing a stage where the work is sufficiently complete according to the terms of the contract, allowing the owner to occupy or use the space for its intended purpose. This means that while the project may not be entirely finished—there could still be minor details or punch-list items to address—the critical components are in place, and the project can be utilized effectively.

This definition is important as it impacts various aspects of the construction process, such as when the project can be used, when payments may be requested or released, and when the construction liability begins to shift from the contractor to the owner. Therefore, substantial completion is often tied to the project's schedule and financial arrangements.

Understanding this term is crucial for contractors, owners, and stakeholders as it marks a key transition point within the construction timeline, indicating that the project is on track to meet its intended goals even if some finishing touches are still required.