Construction Closeout Documents: What’s Included & Why

Few parts of the building process can feel as stressful and as complicated as closeout: the multi-step, final phase of construction in which a project is prepared to be handed over to the owner. A big part of what makes closeout so challenging is the sheer number of closeout documents that need to be collected, completed, and delivered to the owner.

Closeout documents provide owners with the information and tools needed to successfully manage and maintain their building. These papers and forms also document every part of the project and serve as proof for contractors that they completed their work to the owner's and manufacturers' satisfaction. Successfully delivering all required documents requires planning, organization, and communication.

This article will explore the documents involved in closeout, including what they are, why each is important, and how to keep them organized.

Delivering Closeout Documents to an Owner

Project owners need closeout documents delivered in an easy way to organize and navigate. Owners who struggle to find information often jump straight to contacting the contractor, so clear organization systems can save time for everyone. 

Materials used to be printed out and delivered in a bunch of three-ring binders. These days, materials are commonly delivered digitally, making storing and searching easier. However, these virtual binders should still be very organized, with clear naming conventions and well-organized folders. Before the project even begins, a general contractor (GC) should clarify if an owner has preferences regarding how documents are organized and delivered.

Submittals for Closeout Documents

Many important documents — from before work begins to the end of closeout — must go through a submittal process. This is when a contractor sends specific documentation of their work to an architect or engineer for approval. Submittals are usually included in closeout documents as proof that work was completed satisfactorily and that any changes were approved. 

One change made during construction usually requires many additional submittals. If, for example, availability forced a contractor to use a different sheetrock than what was in the original plans, they would need to submit that material change, as well as submitting the operation and maintenance manual for the new sheetrock, the warranty, and approvals to paint the sheetrock. Each of these would be included in the closeout documents.

Common Closeout Documents

Required documents vary based on the building, location, and intended use. In most cases, the required documents will be listed in the contract specifications agreed upon at the beginning of the project. 

For example, contract specifications about concrete would specify the type of concrete to be used, as well as a list of concrete-specific required documents, which might include warranties, manuals, and lien waivers. 

Redline drawings

At the beginning of the job, contractors receive drawings of the architects’ and engineers’ plans for the project. Throughout construction, contractors mark up these drawings to reflect status updates and to document changes as they occur. These marked-up plans are called redline drawings, and are used to make the final as-built drawings. 

Redline drawings serve as a reference for why and when changes were made, but they also document important parts of the building process. An owner might reference red line drawings to verify work was completed before paying a contractor. Following important inspections, such as mechanical, electrical, or plumbing, an inspector will often sign and mark the inspected area on the red line drawings.

As-built and redline drawings are usually both included at closeout because they serve as complementary depictions of the construction process. For example, a contractor might decide to slightly alter the path of an underground waterline if they discover the planned route went through a tree. That change would be marked in the redline drawings, submittals for the change would be attached, and the designer would reference these notes and changes to create an accurate final as-built drawing. All of these would be included in the closeout documents.

As-built drawings

The as-built drawings depict the building’s final construction, including all changes made throughout the project. This is one of the most important documents shared at closeout. For owners, these drawings can be referenced in the future when questions about the building arise. For contractors, the drawings serve as proof that the project was completed satisfactorily.

As-built drawings are similar for most types of projects, whether it’s a towering office building or a small home. The drawings are contractually binding documents that should precisely reflect the finished product. If the as-built drawings don’t depict the finished structure as it actually is, the contractor will be required to either change the drawings or alter the construction. 

Warranties

Contract specifications should clearly state what warranties should be included in closeout documents. There are usually two types: workmanship and manufacturer. 

Contractors on the project give workmanship warranties, which state their work was done correctly and that, if problems arise, they will fix them. These warranties are usually valid for about a year after completion. 

Manufacturer warranties cover equipment installed by ensuring a supplier will replace equipment or parts that malfunction. These warranties usually last for many years and are particularly important for large, expensive pieces of equipment that were custom-built for a job, such as an electrical switch. 

Warranties function similarly for most types of buildings, as they are specific to a contractor, their area of work, and are usually dictated by what’s in the contract specifications. Owners are often eager to receive warranties, because many only take effect once a project has been handed over. This means, during construction, damage to a roof from a hailstorm would likely be covered through insurance. However, if that damage were to occur after closeout, it would likely be covered by one of the manufacturer or workmanship warranties. 

Certificate of Occupancy (C of O)

Another of the most important documents shared during closeout is the certificate of occupancy, or “C of O.” In most places, a C of O is required for a building to be sold, units to be rented, or businesses to open. Certificates of occupancy are issued by a local building authority, and usually require a process that includes an application and passing many inspections. Many local governments issue lawsuits or repeated fines to owners who open a building without a C of O. 

Some building authorities offer a conditional or temporary certificate of occupancy (TC of O), which says a building is generally safe but has minor issues to resolve before receiving its final certification. While this can be helpful for a contractor working to move a project forward or an owner looking to begin to use a building, a TC of O usually isn’t included in closeout documents, as the documents aren’t considered complete without an official certificate of occupancy.

Certificate of Substantial Completion

A certificate of substantial completion is a document signed by the owner and contractor that agrees a building is ready for its intended use, even if minor work still needs to be done. 

The certificate of substantial completion and the certificate of occupancy are two distinct but connected documents. Most owners won’t issue a certificate of substantial completion unless the building already has the C of O. Projects using contract documents from the American Institute of Architects (AIA), consider a building to be sufficiently done when both a C of O and a certificate of substantial completion have been obtained. 

A certificate of substantial completion is often important for contractors to receive final payments, or more specifically, for their retainage to be released, as it is an acknowledgment that they have completed their work to the satisfaction of the owner. 

Lien Waivers

Everyone who works on a project is usually expected to provide a lien waiver. A lien waiver states a payment was made and waives a contractor’s right to place a lien, which is a legal claim that can be made to ensure someone receives compensation. Some projects use payment bonds, which directs any non-payment claims to a surety company. These are particularly common with government projects. In these cases, a contractor would issue a payment bond waiver. Both types of waivers help owners verify all outstanding bills are settled. 

Contractors usually issue two types of lien waivers: conditional and unconditional. A conditional lien waiver is generally from a subcontractor to a general contractor, and states that work has been completed and a payment has been submitted. Once the payment is made, the subcontractor will issue an unconditional lien waiver, stating the transaction is fully complete. Final unconditional lien waivers are usually the only type of waivers included with closeout documents, as they represent the complete resolution of a transaction.

Many states require specific forms to submit a conditional or unconditional lien waiver. The AIA keeps a list of the forms for both progress and final lien waivers.

Pay Applications

A pay application, or pay app, is similar to an invoice. It gives an itemized breakdown of expenses and states how much a contractor or subcontractor is owed for their work. There are a few standard forms used for pay apps, including the AIA G702. At the very least, a final pay application is usually submitted as part of the closeout documents, and will include any final payments or retainage.  

For jobs with a cost-plus contract, all pay apps for the whole project would be included in the closeout documents. This serves as an itemized receipt, since cost-plus contracts stipulate that an owner pays the GC an additional percentage on top of all costs. If the contract is a lump sum contract, most pay apps are not included with closeout documents. 

Punch List

A punch list is an inventory of all items identified during closeout that weren’t done, weren’t working as expected, or weren’t aligned with approved building plans. These items need to be addressed for the building to be finished. Closeout documents should include the complete punch list and acknowledgements from the owner, owner's representative, or someone on the design team that each item was addressed.

Punch lists generally include more minor issues, such as repainting a spot on a wall, fixing peeling floor tiles, or redoing caulking around a sink. Each of these items is necessary to meet the terms of the contract but is not necessarily required to obtain a C of O. Issues that need to be resolved in order to obtain a certificate of occupancy are considered urgent and should be addressed immediately. For example, a fire suppression system that didn’t pass an inspection would not be on a punch list, but would instead have its own, urgent course of corrective action.

Depending on the project, the number of punch list items can easily reach into the hundreds or thousands. Understandably, keeping track of all these items can be a challenging process, so it’s important to have an organizational system. Resources such as Procore’s Punch List Tool can help index items, assign tasks, select due dates, and track status updates. 

Change Orders

Change orders are modifications to a project made throughout construction. Unlike a punch item, a change order is usually outside the initial scope of work, so they often include their own ticket, approval of completion, and billing. All of these elements should be included in closeout documents, in addition to ensuring the change is incorporated into the final as-built drawings.

Operation and Maintenance Manuals

Because closeout is meant to prepare an owner and their team to manage and maintain a building, closeout documents should include manuals for all equipment or systems installed during construction. Suppliers and vendors often provide these when delivering or installing their products. Sometimes, a manual will include a start-up report, another closeout document that will be explored more below.

Oftentimes, contractors or vendors are required to train the owner’s team on the equipment or systems they installed. While training is its own part of closeout, documentation of the training, either in the form of a handout or a video, is sometimes required as part of the closeout documents. These serve the dual purpose of creating a reference that can be reviewed or shared as well as proof that a contractor fulfilled their responsibilities. 

Reports

A number of different reports are often submitted during closeout to provide an overview of completed work, verify components and systems were functioning properly at the time they were transferred over, and provide detailed information on how these systems work. The two reports usually included in closeout documents are startups and commissionings.

• Start-up reports show equipment or systems are able to fulfill their most basic function, such as checking if a drain line drains, pipes leak, snow melt systems produce heat, or an A/C blows cold air. Start-up reports essentially check if a system does what it’s supposed to when it’s turned on, without considering peak performance. These reports are often done by the installer and are sometimes included with an equipment’s operation and maintenance manual.
• Commissioning reports verify the performance of systems. A commission report for ductwork in an HVAC system would verify that the right amount of air is coming through every vent and at the correct temperature. Most of the time, a contractor will hire a third party to conduct commissioning reports, as this ensures reports are impartial and thorough. 

Other potential closeout documents

Some contractors include documents that weren’t stipulated in the contract specifications but will help an owner manage and maintain their building. An example would be including a list of subcontractor contact information, which would be helpful if an owner has issues or questions about a specific part of the building.

Because each project is different, the documents required will also differ. This is particularly true for buildings that are highly specialized. An industrial gas facility would require specific tests, inspections, and certifications, all of which would require submittals. A hospital’s medical gas system, for example, may require a med gas certification, inspections, reports, and manuals. Many of these special elements would be needed to obtain a certificate of occupancy but would also be included with the closeout documents because of their importance to the functioning of the building.

The Challenges of Collecting Closeout Documents

Closeout documents reflect the construction process from before a shovel hits the dirt to after the last touch of paint. It’s an immense amount of documents to keep track of, which only gets more intense with bigger and longer projects. 

From the beginning, it’s important to have a system of organization. An underground utilities contractor might complete their work years before closeout, yet the GC needs all closeout documents pertaining to their work. Contractors who wait to begin thinking about these documents until the last few months of construction may find themselves trying to complete a large number of tasks in an impossibly small amount of time. 

Procore has a number of tools to help make closeout more manageable, such as applications to track change orders, build action plans that are visible to all parties, and automatically generate submittals.

Making Closeout Documents Manageable

Contractors should begin planning to collect, complete, and deliver closeout documents at the very beginning of the project by doing things such as referencing contract specifications, understanding what’s needed from each subcontractor, and creating a system to organize documents. 

One of the best ways to make document collection and delivery more manageable is to spend time becoming familiar with the closeout process as a whole. The process has many things to consider and schedule, and managing documents becomes easier when it's clear how and when that can happen. 

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