June « 2009 « Home Building Online News

Where certain residential building works are carried out, a final inspection is required, and a Certificate of Occupancy or Final Inspection Certificate is issued.

Make sure that your contract does NOT require you to obtain any type of Certificate of Occupancy or Final Inspection Certificate.  Even though the project may be finished, some clients may withhold your final progress payment until such a certificate is obtained, and you do not want payment of the final progress payment to be contingent on obtaining that certificate (which can sometimes be completely out of your hands).

A security account is an account set up in the names of both the builder and the client, and the funds that the client will be using to pay the progress payments are deposited into this account.

If the client does not want to set up a security account, make sure your contract gives you the right to request the client, at any time, to produce evidence that they have the financial capacity to make all payments under the contract.  This will allow you to satisfy yourself that the client has sufficient funds.