A finished project, no matter how big or small, stands testament to the hard work, dedication, and grit that contractors put into their craft. But when the final punch list items are taken care of, it can be hard not to immediately look forward to the next project.
Before this can happen, however, a crucial step remains before a contractor can closeout a project; the construction certificate of final completion. A final completion certificate formally signifies that all required work has been completed, inspected, and approved. It’s the final stamp of approval for a job well done.
In this article, we’ll explore the components, uses, and best practices of a professionally crafted certificate of final completion. And if you need help getting started, don’t forget to download our free certificate of final completion template later on in this article.
What is a certificate of final completion for construction?
A certificate of final completion serves as a legal document to officially signal that a project is complete. Or rather, that the specific part of the job that a contractor is on the hook for is complete.
What makes this document official?
The issuing contractor, project owner, and inspector (an engineer, city worker, or architect) must agree and provide signatures. In this way, the certificate serves as definitive proof that the project is complete.
However, it’s not just project stakeholders that rely on a certificate of completion, as most properties can’t serve their intended purpose until certified legally. Most properties aren’t allowed to serve their intended purpose until certified legally.
For contractors, the certificate is the final milestone of a construction project. When the certificate is finalized, it means the owner can enjoy the finished product, and contractors can get paid. It will also kick off post-job conditions, such as any warranty clauses in the contract.
Certificate of final completion vs. Certificate of substantial completion
Before we dive deeper, there is a distinction to make note of here. There is a difference between a certificate of substantial completion and a certificate of final completion. Contractors must never use or think of these documents as one and the same.
Everything mentioned thus far pertains to a certificate of final completion, in which a project is 100% complete requiring no more work. A certificate of substantial completion works much the same way, with one big exception. The project will still have outstanding tasks (i.e., the project is almost done but not quite 100% finished).
What constitutes “substantial” completion? Get the answer to that and much more by reading our substantial completion article here.
Now let’s look at when to use a certificate of final completion and the sections that make up this crucial document.
When to use a certificate of final completion
Contractors will use a certificate of final completion any time they complete their portion of work in full. Many times, the contract will state that a certificate is required. In this case, contractors are legally obligated to supply a certificate. In addition, lenders or housing authorities may even require a final completion certificate before releasing final payment to contractors.
Even if the contract does not explicitly require a certificate, consider working one into your agreement before the project starts.
Why would a contractor want to force inspection on their own work?
- To signify the end of a project.
- To document that all payments have been made in full or to document that payment is still outstanding.
- To assure the owner that all of the contracted work is satisfactory.
- To finalize the construction contract and release all parties from any remaining obligations.
From a subcontractor’s perspective, a certificate will secure a paper trail for contractual reasons. It provides clear documentation that you did the job the way the client wanted it done.
If a stakeholder holds you responsible for any issues or wrongdoings in the future, you can confidently reference the certificate as proof that you handled the job according to the plans and contract. If any issues exist, it’s the result of the contract and project plan, not you as the contractor.
Sections of a certificate of final completion for construction
A certificate of final completion will specify general conditions such as:
- All parties involved.
- When construction began.
- Final date of completion.
- Statement of completion with any additional clauses.
- Final construction costs owed and paid to the contractor.
In this section, contractors should list who the certificate concerns, which should match the contract, i.e., who are the stakeholders listed on the contract. List yourself as the contractor, along with the names of the project owner, project managers, architect, engineer, or design professional. Include all relevant parties.
A certificate of completion should include all important dates related to the execution and completion of the project. This includes:
- Contract date
- Date of substantial completion
- Date of final completion of the work
In this section, list the date range of the contract; mark when the project officially started and ended. If applicable, record the date when substantial completion was reached (the requirements for substantial completion will be denoted in the contract).
Certificates of completion should detail financial information according to the contract. You should include:
- Sales tax: Include all relevant tax information. This will be subject to local and state laws.
- Total cost: Final cost of the project incurred by the contractor broken down by labor and materials.
- Payments received: Total amount paid dates of payment.
- Remainder due: Total amount of outstanding payments owed to the contractor.
Statement of completion
As a legal document, the certificate should include statements that make clear the purpose of the certificate. For example, this section may read, “All work has been performed in accordance with the contract terms, and all finished outcomes have been inspected, reviewed, and approved.”
Finally, the last section will capture signatures amongst all relevant parties.
Example of a certificate of final completion for construction
[Example] Certificate of final completion
This Certificate of Final Completion is issued this [Date] to certify that [Contractor name] has completed all of the work required by the contract for [Name of project], located at [Project address], in accordance with the terms and conditions of the contract.
The Contractor has completed all of the work required by the contract, including [list of work completed], and has met all of the requirements for the project. The Contractor has been paid the sum of [Final amount] for the work completed, and the remaining balance due to the Contractor is [Remainder due to contractor].
This Certificate of Final Completion is issued to certify that the project is complete and that all of the terms and conditions of the contract have been met.
The final amount due to the contractor is [Final amount due].
The remainder due to the contractor is [Remainder due].
This certificate is issued as evidence of the completion of the project.
DATE OF FINAL COMPLETION: ___________________________
SIGNATURE OF CONTRACTOR: ___________________________
SIGNATURE OF OWNER: _________________________________
The above is a bare-bones example. Use it as a starting point. Make an effort to include all the necessary details and requirements of your specific project.
Check for any legal or contractual obligations. These may include the location of the land or job site; information about the developer; or specs of the property, such as the height of the building, square footage, or other relevant details.
Certificate of final completion for construction [free template]
[Example] Certificate of final completion
This Certificate of Final Completion is issued this ___ day of ________, 20___, by _____________________ (“Owner”) to _______________________________________ (“Contractor”) for the construction project located at ____________________ (“Project”).
The Owner and Contractor hereby certify that the Project has been completed in accordance with the terms of the contract and all applicable laws, regulations, and codes.
The Owner has inspected the Project and has accepted it as complete. The Final Payment of __________ ($___________) has been paid to the Contractor. The Contractor has been paid in full for the Project and no further payments are due.
The Owner and Contractor further certify that all financial information related to the Project has been accurately reported, including the Final Amount and Remainder due to the Contractor, if any.
This Certificate of Final Completion is binding on the parties and their successors and assigns.
How Knowify helps
Certificates of completion are just one of the many contract documents that contractors must juggle on a daily basis. With so much paperwork to manage, manually tracking and organizing everything isn’t sustainable for a growing contracting business. Especially in today’s fast-paced world where clients are becoming increasingly demanding.
Say goodbye to sleepless nights spent worrying about what’s next with Knowify. We deliver construction management software built specifically for specialty trade contractors. Create, manage, and store crucial documents in one easy-to-use platform. Storing, tracking, and organizing vital project documents has never been easier.
To see how Knowify can transform your business and help you take it where you want it to go, schedule a quick 30-minute demo with our team today.
The documents provided in this article serve only as an example template and does not constitute legal advice. The contents of these documents should not be used to create a binding contract, and should be modified to meet the individual needs of the parties. Therefore, Knowify does not take any responsibility for any legal contracts or consequences made using any of the above templates. Parties should consult with their respective legal counsel prior to executing a contract based on this, or any, agreement.