Why your contractor should have an exit punch list.
The punch list is typically the last step in your construction project. It’s a practical and useful tool, used to double-check that every part of the construction project, has been completed according to the owner’s specifications.
It’s also known as a “punch-out list,” a “close out checklist,” or a “final checklist.” It’s called a “punch list” because historically contractors would manually punch out holes next to each item on a paper list to show that a task was complete.
Some construction companies develop a punch list when the project reaches 98-99% completion. They then use it to control task finishing of the many small elements that usually get left over at this stage.
This is why punch list items are usually minor fixes. Below, let’s go through some examples of items you might find on a punch list.
What items go on a punch list?
The list usually includes project items to test, add, fix, or remove. The specific items will depend heavily on the project, but we’ve listed several examples below to give you an idea of the kinds of things you may see on a punch list.
Examples Items to test
- Appliances
- Equipment
- Doors & windows
- Thermostat
- Plumbing fixtures
- Mechanical elements
- Internet/phone/cable
- HVAC zoning
- Etc.
Items to add
- Light covers
- Hardware
- Paint touch-ups
- Coating/sealant
- Etc.
Items to fix
- Plumbing leak
- Damaged drywall
- Improperly installed flooring
- Pavement crack
- Etc.
Items to remove
- Trash
- Equipment
- Tools
- Protective covers
- Etc.
Who must generate and follow up on a punch list?
Everyone on a construction project has a role to play in the execution of a punch list, including the general contractor, owner, architect, and any subcontractors.
Typically, it’s the responsibility of the general contractor to ensure that all these line items are taken care of before a final completion certificate can be issued on the project. The GC may assign punch work to the subcontractors responsible for particular areas of work.
Generally, the GC will do a walkthrough with the owner to identify any incomplete or non-conforming work and create the initial punch list. Depending on what issues remain, certain subcontractors may be called back to the project to correct outstanding issues. For many projects, that’s as far as the punch list goes.
If the project has one, the architect also plays an important role in reviewing the punch list to approve final payments. The GC will send their punch list to the architect, who will then conduct their own walkthrough to determine what has been completed to their design specifications and what hasn’t.
The architect will then update the punch list and send it back down to the owner and GC. The GC is then in charge of sending out the punch list to the subcontractors and ensure they complete all the work.
Subcontractors typically bear the heaviest load in the punch list process. They are the ones who are performing much of the punch work and gathering all the necessary change orders and documentation that the GC must pass on to the owner. The best practice here is to start organizing these documents as soon as possible rather than waiting until the end of the project.
How punch work helps get subcontractors paid
Everyone on a project should focus on the punch list because it makes sure the building is ready for occupancy, but also because it’s a key step before final payment. An owner will typically be holding onto retainage payments until the punch list items are completed, which puts the fate of the contractor and subs in the owner’s hands.
After all, retainage often exceeds the profit margin on the job. When the contractor believes that he has reached substantial completion, they can request a “pre-final” inspection of the project. With any luck, the punch work needed will be trivial and the final payment won’t be too far off.
In most contracts these days, final payment is released when the punch list items have been completed to meet the contract specifications. Once “punched,” the list is then typically attached to the Certificate of Substantial Completion.
How do punch lists affect lien rights?
Typically, the mechanics of lien deadlines starts ticking from the “date of last furnishing of labor/materials” or the substantial completion of the project. The tricky part here is that most states don’t include punch work when determining lien deadlines. Every state has different mechanics lien laws that set filing deadlines. These deadlines need to be met in order to secure lien rights. So how can you protect your payments with punch lists?
Many would consider their last day of furnishing labor or material to the project or the completion date of the project to include punch list work, but in the mechanic’s lien context, they would be wrong.
For whatever reason, states almost universally exclude punch list, warranty, and other remedial types of work from any of these calculations.
The danger here is clear. If you don’t take this rule into account, your actual mechanics lien deadline could fall much, much sooner than you expect.
3 ways to protect your lien rights with punch lists
Because punch items are difficult to anticipate or define in a contract, it is important for subs to be prepared. The 3 keys for this process are communicate, document, and educate.
Communicate
Having open channels of communication with your GC or project manager is crucial to successfully closing out your contract. Anytime there’s an interference or damage to your work — let them know, right then and there. The GC’s main goal is to reach the finish line too. The fewer the items, the easier life will be. So informing the GC as early as possible will reduce delays make closeout simpler and easier so both of you can get paid.
Document your work
Photograph anything and everything. Documenting your work with progress and completion photos can help ensure that you aren’t called back to do additional work. Many times, especially for trim-out and finish work, other contractors will begin the next phase of construction and potentially damage your completed work. If any issue arises, you’ll have photographic proof and documents that demonstrate your work.
Educate yourself
Read your contract. Then read it again. Make sure that your scope of work is as detailed as possible, and that your responsibilities are included. Otherwise, you might end up doing work or paying for items that are potentially outside your scope of work.
The bottom line on punch lists
Each project faces its own unique challenges, but preparing a complete and accurate punch list will give everyone on the project a clear understanding of what needs to be done in order to finish the project.
