Michigan Residential Builders License Practice Test

When is substantial completion of work considered to be obtained?

1. When the owner can take possession and use the structure for its intended purpose

2. When all inspections are passed

3. When all necessary permits are obtained

4. When the design is finalized

The correct answer is: When the owner can take possession and use the structure for its intended purpose

Substantial completion of work is defined as the point at which the owner can take possession of the project and utilize it for its intended purpose. This milestone signifies that the construction has been completed to a degree that satisfies all the critical requirements needed for the project to function as intended, even if minor work remains. This concept is essential in determining when an owner can actually begin using the space, which may be important for financial obligations, occupancy permits, and the timing of project closeout. While passing inspections, obtaining permits, and finalizing designs are certainly necessary steps in the construction process, they do not singularly signify that a project is ready for its intended use. Ultimately, it is the ability of the owner to occupy and utilize the structure that marks substantial completion.