IGNOU MSCCFT and PGDCFT Exam Question Pattern: MCFT003 Counselling and Family...
Pp2 p7
1. Professional Practice 2 - P7
Partial Possession by Employer
Louise Fong (0322815)
Muhd Fareez Sham (0322961)
Chan Wei Lun (0326117)
2. ● Used part of the building before practical completion
● Clause 16.0: Employer wishes to take possession of certain sections of the works
before the whole Works is completed.
What is partial possession?
3. Why partial possession?
● Business Pressure- Current demand and price is good so they need to start business or
production
● Commercial reasons- Works has been delayed so the need to complete early, thus
partial possession for some sections.
4. How to take partial possession?
● Under clause 16.0 employer must give a written notice of intention to take partial
possession to contractor, so that contractor can prepare himself and focus the part of
employer want to occupy.
1. Partial possession occur before practical completion.
2. The employer to identify part to be taken over.
3. The contractor have given his consent
● Contractor cannot unreasonably delay or withhold such consent
5. Contractor consent for partial possession
● Clause 16.1 prohibits the Contractor from unreasonably withholding or delaying
consent. However, the Contractor is not bound to give consent for partial possession.
● Reasons :
1. Health and Safety Issue
2. Disturb the progress of work
3. Non-payment issue for work done
6. Certificate of partial completion
● Clause 16.1(a): Architect must issue Certificate of Partial Completion within 14 days
of taking partial possession of the Occupied Parts.
● Certificate of Partial Completion must include date of partial possession. Layout plan
is a must to identify or demarcate the occupied part and estimated value of the
occupied part
8. Example of calculation
• If Occupy part is RM2 Mil. Contract sum RM10 Mil. Liquidated Damages RM1000/day
• New liquidated damage = 1000-(2/10x1000)
= 1000-200 = RM800 per day
• Liquidated damages of RM800 per day shall apply to the remaining works
9. Retention sum
• Clause 16.1 (d): Architect must issue a payment certificate to release the first
moiety of the retention fund in the ratio of the estimated value of the
occupied part and must issue payment certificate within 14 days after the
issuance of the certificate of partial completion.
• Formula for retention sum: RP = VOP/CS x R
● RP= the amount of retention to be released
● VOP= estimated value of Occupied Part
● CS= Contract Sum
● R= Maximum Retention
10. Example
• Retention sum (max) is RM500,000. Value of Occupied Part is RM2,000,000.
Contract Sum is RM10,000,000.
• Value of retention sum for Occupied Part is 2/10 x 500,000= 100,000/2 =
RM50,000
• 1 st moiety to be released = 100,000/2 = RM50,000
11. Certificate of making good defects (CMGD)
• Clause 16.1(e): All defects in the Occupied Parts have been made good, the Architect
shall issue a CMGD
12. Release of second moiety of retention
• 16.1 (f), the Architect shall issue a certificate for the release of the remaining retention
fund (second moiety) for the Occupied Part within 14 days after the issue of CMGD of the
same Occupied Part.
13. Items not affected by partial possession
Work Insurance
• Clause 20.A.1: Contractor shall keep such works so insured notwithstanding any
arrangement for partial possession.
• Total sum insured of the above provision is that the parties insurance obligations remain
unaffected.
• Respective parties remain obliged to insure and keep the works insured to the full value ,
there being no reduction for the value of the Occupied Part.
14. Items not affected by partial possession
Performance Bond and Final Certificate.
• Clause 30.6 for Performance Bond does not indicate any deduction or reduction of the
bond value after partial possession.
• Clause 30.0 for Final Certificate are not affected by the partial possession since there is
only one Final Certificate issued.
• Hence, it can be inferred that both the Performance Bond and the Final Certificate are to
remain unaffected by the issuance of Certificate of Partial Completion.
15. Partial possession by employer (without consent)
• The employer may trigger breach of contract
• Restrictions on employer right to take possession without consent
• Clause 16.2: A provision which caters for the common practice where the Employer
does, or is forced to take over parts of the works before practical completion without the
Contractor’s consent.
16. Restrictions on employer rights to take partial possession
without consent
• Employer has no absolute rights.
• Clause 16.2(a) may take partial possession provided three preconditions are met:
i) The completion of Works have been delayed
ii) A Certificate of Non-Completion has been issued by Architect under clause 22.1
iii) Partial possession do not unreasonably disturb the regular and remaining work
17. Employer’s rights limited by the contract
• Clause 16.2 “without prejudice to any other rights and remedies which he
may possess under the contract”
• Limit employer right to those under contract only
18. Procedures following partial possession (with or without
consent)
• Clause 16.3: Govern the Contractor’s duties following partial possession by the
Employer, whether with or without contractor’s consent.
i) Contractor shall remove all facilities and equipments from the occupied part upon the
receipt of AI
ii) Architect shall prescribe the time for removal from occupied part
iii) However contract silence on consequences of non compliance by contractor and
remedies of employer
iv) It is also silent on remedies available to employer for such non-compliance by the
Contractor.
20. Q1:Explain the differences between Sectional Completion and Partial
Possession in PAM 2006.
Sectional completion Partial completion
Clause 21.3 Clause 16.1
Stated in contract documents (different
sectional commencement date and different
sectional completion date)
Not stated in contract documents
Architect to issue the Certificate of Partial
Completion within 14 days of taking partial
possession of the Occupied Parts
Architect to issue the Certificate of Sectional
Completion when the sections of Works are
Practically Completed.
Happened before Signage of Contract Happened after Signage of Contract
22. Q2: Under what circumstance can the Employer take partial possession of the site?
Please explain for both partial possession with and without consent from the
Contractor.
● Under Clause 16.0, the employer must comply with the following:-
1. To give written notice of intention to take partial possession to contractor
2. The partial possession occurs before practical completion.
3. The employer to identify part to be taken over.
4. That the contractor has given his consent.
23. Answer:
Partial possession with consent from the Contractor:
● Under clause 16.1, the contractor cannot unreasonably delay or withhold such consent.
Partial possession without consent from the Contractor:
● Under clause 16.2, the Employer may take partial possession provided three pre-conditions are
met:-
a) The completion of Works have been delayed
b) A Certificate of Non-Completion has been issued by Architect under clause 22.1
c) Such entry and partial possession of the Occupied Part do not unreasonably disturb the regular
progress of the Contractor’s remaining works or adversely affect the safety and health issues.
24. Q3: Explain the contractual implications of partial possession and the
items not affected by it.
1. Work insurance
- Under clauses 20.A.1,20.B.1, 20.C.1 are stated that the parties’ insurance
obligation remain unaffected by the partial possession situation; the value
insured is full value and so that there is no reduction can be made.
25. Q3: Explain the contractual implications of partial possession and the
items not affected by it.
2. Performance Bond & Final Certificate
- Under Clause 37, it stated that for performance bond does not indicate
any deduction or reduction of the bond value after partial possession.
- Under Clause 30.0, it stated that for Final Certificate are not affected by
the partial possession since there is only one Final Certificate issued.
- Therefore, it can be inferred that both the Performance Bond and the
Final Certificate are to remain unaffected by the issuance of Certificate of
Partial Completion.
27. Question 1:
How many percent (%) of retention sum that the employer need to release to the
contractor after the partial possession is completed and hand over to the
employer?
28. Answer For Q1:
Any part for which partial possession is given is deemed to have achieved
practical completion. Therefore, 50% of the retention for that part must be
released. And the balance of 50% will be released after the issuance of certificate
of making goods defect (CMGD) by the architect.
29. Question 2:
• Architect shall issue the Certificate of Partial Completion within
how many days and under which clause?
30. Answer For Q2:
Within 14 days of taking partial possession of the Occupied Parts. Clause 16.1(a)
31. Question 3:
Whats should the contractor do if the employer takes possession of the
Occupied Part, whether with or without contractor’s consent?
32. Answer For Q3:
Under clause 16.3 govern the Contractor’s duties following partial possession by the
Employer, whether with or without contractor’s consent.
1) Contractor to remove his site facilities, equipments, plants, materials, etc from
Occupied Part upon receipt of Architect’s written instruction.
2) It is implied that the Architect must prescribe a definite time for removal from the
Occupied Part and this should be a reasonable time frame
