Plain English Explanation
This CE arises when the PM certifies that the Client has taken over a part of the works before the Completion date. Under NEC4, if the Client starts using a section of the works before Completion (and the PM certifies this), the Contractor may be entitled to a CE for any additional cost or loss arising from that early take-over.
This is particularly relevant to projects where the Client starts using part of a building or facility before the whole project is complete — for example, fitting out one floor while others remain under construction. Early take-over can significantly affect the Contractor's programme, access, insurance position, and risk allocation.
Note: NEC4 adjusts the way this CE operates compared to NEC3 — the NEC4 version is clearer about when early take-over triggers a CE.
Key Takeaway
If the Client begins using part of the works before the PM certifies take-over, the de facto occupation still triggers the CE — you do not need to wait for a formal certificate to notify.
What This Means for Subcontractors
Subcontractors can be significantly affected by partial take-over — particularly if it means restricted access, additional temporary protection requirements, or sequencing changes. If the main contractor receives a CE for partial take-over from the Client, check whether the subcontract passes on the commercial relief or whether the main contractor absorbs it.
Common Risks & Disputes
- 1Not recognising that partial beneficial occupation by the Client triggers take-over even without a formal PM certificate
- 2Failing to assess the cost implications of working alongside an occupied premises or live facility
- 3Insurance gaps — partial take-over changes who is responsible for insuring different parts of the works
- 4Programme disruption from having to accommodate the occupied area causing uncompensated disruption to remaining works
- 5The PM not certifying take-over despite the Client clearly occupying and using part of the works
Sources
Related Clauses
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