Chapter 26 - § 26.11 • ACCEPTANCE OF THE WORK; THE PUNCHLIST

• Jurisdiction: Colorado

§ 26.11 • ACCEPTANCE OF THE WORK; THE PUNCHLIST

§ 26.11.1—The Punch List

The work letter typically addresses a procedure for the tenant to accept the landlord's work. The procedure usually involves the landlord's giving the tenant notice that the work is substantially completed and requiring the tenant (or providing the tenant the opportunity) to inspect. During the inspection, the tenant prepares a list of items that need to be corrected or completed for the landlord's work to be completed. This is the "punch list." The landlord is given a specified time to complete the punch list items. The work letter (or the lease) usually provides whether the landlord delivers possession of the premises to the tenant upon completion of the punch list items or after completion of the work on the punch list.

§ 26.11.2—Substantial Completion

The tenant will want to be sure that, if the lease commences upon substantial completion of the tenant finish, the definition of "substantial completion" is adequate for its purposes. If it signifies the time that the tenant should be able to move into the premises, the tenant will want to be sure that all the building systems are operable, that it has reasonable access to the premises, and that a temporary or permanent certificate of occupancy (or other approval required in the jurisdictions where the premises are located) has been obtained so the tenant may lawfully occupy the premises. If it signifies the time the tenant can start its tenant finish or trade fixture installations, the definition of "substantial completion" should be made adequate so the tenant can, in fact, begin its work or installations.

§ 26.11.3—Tenant's Acceptance

The work letter or the lease usually will provide that taking possession of the premises constitutes the tenant's acceptance of the premises and the landlord's work, except for any punch list items that have not been completed. Tenants usually ask that latent defects be excluded from this waiver. The landlord wants the certainty that is has performed all its work and that it will not be called on to do further work after the tenant has moved in (except to the extent of the landlord's maintenance obligations under the lease, if any). Once the tenant has moved in, it becomes less clear whether any problem that arises in the premises is the result of a defect in the initial performance of landlord's work or the result of the tenant's misuse. The landlord wants a bright-line demarcation at the point the...