Partial possession refers to an employer taking possession of certain completed sections of a building project before the entire works is finished. An employer may take partial possession for business or commercial reasons, such as starting production early. The contractor's consent is required for partial possession, but the contractor cannot unreasonably withhold consent. If partial possession occurs, it affects the defects liability period for the occupied section, reduces liquidated damages, and triggers the release of part of the retention sum. Items like work insurance, performance bonds, and final certificates remain unaffected by partial possession.

1. PARTIAL POSSESSION BY
EMPLOYER
WONG GENG SEN 0321690
JOANNE TEE SIN YI 0315689
THUN SHAO XUN 0315919

2. WHAT IS PARTIAL POSSESSION?
• 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.

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: Health and Safety Issue
Disturb the progress of work
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

7. CONTRACTUAL EFFECTS OF PARTIAL
POSSESSION
• Practical Completion: Practical completion of the Occupied Part
shall be deemed to have occurred on the date of taking over the
Occupied Part.
• Defects Liability Period (DLP): Commenced on the date of
practical completion of the Occupied Part by the Employer.
• Liquidated Damages (clause 16.1©): Liquidated damages shall
be reduced by the ratio of the estimated value of occupied part to
the contract sum.

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 x R
CS
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
• 1st 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. ITEM 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. ITEM 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’S RIGHTS TO
TAKE PARTIAL POSSESSION WITHOUT
CONSENT
• Employer has no absolute rights.
• Clause 16.2(a) may take partial possession provided three pre-
conditions 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 equipment's 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.

19. QUESTION

20. QUESTION 1
• Explain the differences between Sectional Completion and Partial Possession in
PAM 2006.

21. ANSWER
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. ANSWER

23. ADDITIONAL QUESTIONS
• Architect shall issue the Certificate of Partial Completion within how
many days and under which clause?
ANS: Within 14 days of taking partial possession of the Occupied Parts.
Clause 16.1(a).

24. QUESTION 2
• Under What circumstance can the employer take partial possession of the site?
Please explain both partial possession with and without consent from the contractor

25. Employer can access partial possession when:
Business pressure – Demand and price is good, required to start work
Commercial reasons – Commencement date of works delayed.
Partial possession by employer with consent
To take partial possession:
- Before practical completion
- Give written notice
- Identify the part to be taken over
- Contractor given his consent
Contractor could not delay or withhold such consent
However, according to clause 16.1 the contractor may withhold consent when:
-Partial possession may give safety and health issues
-Material disrupt the regular work progress
-Non-payment issue for work done
ANSWER

26. Partial possession by employer without consent
The employer may trigger breach of contract
Restrictions on employer right to take possession without consent
Employer has no absolute right to take possession, unless it met three condition:
- Completion work has been delay
- Certificate of non-completion ahs been issue
- Partial possession do not unreasonably disturb the regular and remaining work
Employer right are 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
ANSWER

27. Procedure following partial possession (with or without consent)
Clause 16.3 govern the contractor duties following the procedures
- Contractor shall remove all facilities and equipment's from the
occupied part upon the receipt of AI
- Architect shall prescribe the time for removal from occupied part
- However contract silence on consequences of non compliance by
contractor and remedies of employer
ANSWER

28. ADDITIONAL QUESTIONS
What are the remedies if contractor does not give partial possession to
the employer?
ANS: - Determine the reason
- Claim for lose and expenses

29. QUESTION 3
• Explain the contractual implications of partial possession and the items not affected
by it.

30. ANSWER
Contractual effects of partial possession
a) Practical completion - Clause 16.1(b)
b) Defects liability period (DLP)- The DLP is deemed to have commenced on the date of practical
completion of the Occupied Part by the Employer
c) Liquidated Damages (LD) - Clause 16.1(c)

31. ANSWER
Items Not Affected by Partial Possession
a)Work Insurance
- Under Clause 20.A.1, 20.B.1 and 20.C.1
- The total sum insured of the above provisions is that the parties
insurance obligations remain unaffected
b) 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 the Final Certificate are not affected by the partial possession
since there is only one Final Certificate issue

32. ADDITIONAL QUESTION
• Let’s say employer take possession on building A. 3 days later defects
appear on the building A ground floor. Does contractor have to liable
in this situation?
ANS: Contractor have to liable in this situation because once the
employer take the possession of the occupy building Defects Liability
Period Start.