Handing over

Handing over contract
Handing over with sub-contractors
Final payment
1 and 5 years inspections

Enclosures examples

Handing over contract

The contractor informs the client about the time of completion of the work. The client then convenes a handing-over meeting to take place within 10 workdays of the time indicated.
In case the work composes several contracts, all contracts shall (as far as possible) be completed before the handing-over meeting can take place.
Prior to the handing-over meeting, the contractor examines the work in order to establish possible essential defects.
The decision whether work is completed on time or not solely depends on the predefined work completion time as set by the contractor in the completion notice, whereas the handing over time is decisive for transfer of risk, responsibility etc.
In case essential defects are established  during the handing-over meeting, the work cannot be handed over. An essential defect is defined as a defect that impedes occupation.
In case a defect is deemed essential the contractor shall rectify the defect and a new handing-over meeting is convened.
Postponement of hand-over due to essential defects may result in delay and consequently in the payment of penalties.
In cases where only minor defects are identified the client may withhold part of the contract sum until the defects have been rectified.

The handing-over date affects:

  • Who bears the risk for the construction work – including duty of maintenance.
  • Respite for submission of final accounts
  • Defects assessment
  • 5-years rule for complaints
  • Deadline for rectification of defects
  • Reduction of contractor’s security bond
  • Determination of the limitation period

In cases where the tender documents state that the contractor shall submit documentation for operation and maintenance, a request for the handing in of such documents must appear in the invitation for the handing-over meeting.
Concluding the handing-over meeting, reasonable time limits are set for the contractor’s rectification of ‘non-essential’ defects as well as the amount to be withheld from  the contract sum, and a date for a new examination of the project – cf. AB92.
Once the building project is handed over to the client also the the responsibility for coordination of health and safety as well as the safety plan are handed over. Finally, all documentation pertaining to the management of health and safety throughout the building project is also handed over to the client.

According to AB 18 the handing over process will be begin with a pre-examination of the work before the contractor notify the client about the rectification of the work. It is the client who calls in for that meeting re AB 18 § 44. § 45 regulates the handing over like the AB 92 does.

Once the work is handed over the contractor’s security bond will be reduced to 10%.
For a period of 5 years after handing over, it is the contractor’s right and plight to rectify defects established after handing-over.

In case the contractor does not rectify such defects, it is the client’s right to rectify the defects and make out a bill to the contractor, or – demand a reduction in the contract sum.

The client’s claims against the contractor  in connection with building and construction work  must be forwarded  5 years upon handing-over – at the latest. AB 92 § 36/ AB 18 § 55.

However, the client’s claims may be maintained for those parts of the work where:
1) The contractor has agreed to guarantee for an extended period of time.
2) It is being established at the handing-over that agreed quality control has essentially failed
3) Issues of gross negligence on the part of the contractor have been observed.

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Handing over with sub-contractors

The main contractor should only conduct a handing-over meeting with his own sub-contractors after handing-over has taken place with the client. In this way he maintains his right to claim rectification of defects from a given sub-contractor  in the work carried out by the said sub-contractor, and which may be established during his hand over to the client.
By doing so, the main contractor also ensures that his time limits for complaints towards the subcontractor run for a longer period of time than the client’s time limits for complaints against himself. In this way the main contractor can avoid ending up in a situation where he will be made responsible for defects caused by the sub-contractor.
A sub-contractor can enter an agreement of conditional hand-over with the main contractor, which means that the security bond can be reduced but time limits for complaints will depend on the time when the main contractor hands over to the client.
From the main contractor, the sub-contractor receives a trade-specific handing-over protocol listing defects and shortcomings in the work carried out. The protocol also states the latest time for rectifications of defects.

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Final payment

Within 35 workdays of handing-over, the main contractor shall submit final accounts to the client- cf. cf. AB92   § 22 / AB 18 § 36 .. The final accounts must be final. Due to inclement weather it may not, however, be possible to terminate certain works, for example garden work. In such cases a certain amount of the final payment can be withheld, or it can be agreed to convene yet another handing-over meeting where uncompleted parts are being finally inspected and accounts settled.
In case the client is not in receipt of the final accounts at the expiry of 35 workdays of handing-over, he may submit a demand requiring the account to be forwarded within 10 workdays thereof.

If the contractor fails to submit the account to the client within this period, he shall forfeit his right (i.e. he looses his right) to claim payment as reimbursement for wage and price increases  and extra work on bill – cf. AB92 § 22 subs. 8 and 9 / Ab 18 § 36 subsection 7.

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1 and 5 years inspections

The client summons the contractor for an inspection of the work which shall take place one year after handing-over, at the latest.  The client also summons the contractor for a final inspection of the work which shall take place at the latest 30 days prior to the expiry of a 5 year period after handing-over. The invitation deadline is defined in AB92 section 39 / AB 18 § 58. . for In case the client has not summoned for the inspection as mentioned, the contractor may summon the client. The contractor’s invitation shall be in writing and made minimum 10 workdays prior to the day of inspection.
Relevant  documents to be used during 1 and 5 years inspections may be downloaded from
The Danish Construction Association
(Dansk Byggeri).
The condition and possible defects are registered during the 1-year inspection.
During the 5-years inspection it is controlled whether essential defects established during the 1-year inspection have been rectified. Also such defects that the client may have established after the 1-year inspection are registered.
Special rules apply in case works are covered by The Danish Building Defects Fund (Byggeskadefonden).

Be aware of the limitation act. The     clients claim because of defects is limited 3 years after the claim is discovered or should have been discovered by him. It means that it CAN be limited at the 5 years inspection meeting

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