Completion protection
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Completion protection and certificate for exemption from completion protection
If you are going to build a house or carry out measures requiring a building permit on your existing house, in many cases it is required that you obtain a so-called completion protection. Below we tell you more about what a completion protection is and when it is needed. In addition, we explain how you can get help from us at Konstruktionshjälpen to get help with a certificate for exemption from completion protection.
Create your Certificate of Completion Protection
Right now we offer free access to our comprehensive template to create your own Certificate of Completion Protection. This service won't be free for much longer, so take the opportunity to test it now. This template is designed to help you start your construction project without a completion protection. This template applies to simple one- and two-family housing projects.
Fill in information in our digital form. Once you have filled in all the relevant fields, a PDF of your Certificate of Completion Protection will be generated. This PDF is sent to your email address immediately after the form is filled out.
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What is completion protection?
A completion cover can either be insurance during the construction period or a bank guarantee. The purpose of the protection is to help you as a developer if, for example, your contractor goes bankrupt or for some other reason is unable to fulfill its obligations.
Completion protection in the form of insurance is also called completion insurance, completion insurance or construction defect insurance. Normally, the house manufacturer or contractor helps with all the formalities when taking out building insurance. It is also not unusual for them to offer additional services, such as new new construction insurance. However, only the completion protection is statutory.
Completion protection in the form of a bank guarantee is most common in shared contracting, where the developer procures the various contractors separately. Bank guarantees are then issued by the contractors' respective banks, with you as the client as the beneficiary.
Read also: When is a building permit needed?
Which costs are not covered by the completion cover?
Completion cover normally does not cover work that has not been carried out, even if it has already been paid for. Therefore, it is important that the agreement between the consumer and the trader stipulates that the contract sum is either paid in full when the work is finished, or as partial sums according to a payment plan. To avoid this problem, the payment plan can be performance-based, which means that the trader has the right to invoice a partial sum only when a certain work step has been completed.
Who pays for completion protection?
As the developer, you are responsible for signing and paying for completion protection. The client is the person who owns the property and orders the construction work. Completion protection applies to you as well who is to carry out the construction of your own house, a construction company that builds for sale or a condominium association that builds or renovates properties.
How do you apply for completion protection?
Send a request for a quote on completion protection to an insurance company of your choice. This is after you have chosen who will build the house. Then sign your insurance as soon as the contract is signed. Completion protection is also often a requirement in order for you to be able to receive your start notice and with it be able to start construction. Make sure you have your completion insurance arranged in time for your technical consultation, otherwise you may need to supplement at a later date.
How much does completion protection cost?
It is difficult to give an exact price for the cost of completion protection because the price is based on the scope of the construction. However, you can count on the completion insurance costing at least SEK 5,000. If you have hired a smaller craft company with a greater risk of bankruptcy, i.e. with poorer finances, the insurance may be more expensive. Some construction insurances cost over SEK 20,000. When buying turnkey houses or turnkey contracts, completion protection is usually included in the quote.
Do you have to have completion protection?
According to the Act on completion protection (SFS 2014:227), the protection is needed when a trader carries out certain works on detached houses on behalf of a consumer. The protection is therefore not needed for buildings that are not one- or two-family houses.
For single-family houses, completion protection must be available at:
New construction
Extension, if there is a need for such protection
Action that is subject to notification, if there is a need for such protection
New construction means construction of a new building or relocation of a previously erected building to a new location. An extension means a change to a building that involves an increase in the building's volume.
In the case of new construction of a single-family house that is not to be used for permanent use, the building committee can decide that completion protection is not needed. It is you as the developer who is responsible for ensuring that a completion cover is in place when it is required, but it is often signed by the trader/entrepreneur. If there are multiple contractors, completion protection is required for each contract.
Exemption from requirements for completion protection
There are certain possible exceptions to the requirement for completion protection in accordance with the Act on Completion Protection. Here are some situations where a completion protection can possibly be avoided:
Building on your own: If you are going to build yourself, in many cases, completion protection is not needed. This may apply to smaller projects where you yourself are responsible for planning, work and monitoring.
Payment in arrears: If you pay the builder in arrears after each completed part or stage of the project, the requirement for completion protection may be waived. This means that you assess each step of the work and make the payment only when you are satisfied with the result.
Special situations
There are situations where it can be difficult for you as a developer to arrange completion protection. One such example is if the work is to be carried out on an ongoing basis. Banks and insurers often want to limit the completion protection to a certain amount and therefore need to know the agreed price for the remedy. When working on a current account, the final price is not known when the completion cover is to be signed. Despite that, the trader should be able to provide an approximate price statement as a basis for the completion protection.
Most insurers and banks require a written agreement between you as the developer and the trader. It is therefore easiest to use a standard agreement for the construction or extension of one- or two-dwelling houses. If you do not want to enter into a written agreement with the trader, no completion cover can be taken out. The building committee must then decide not to issue a start notice. If the trader does not want to sign a contract with you, it may be a reason for you as the developer to choose another contractor. The same applies if the trader's bank cannot issue a bank guarantee.
The construction assistance will help you with certificates for exceptions to completion protection
If you build on your own or pay your contractors in retrospect after the project/stage has been completed, the municipality may decide that a completion protection is not necessary. The Design Assistant will soon be able to help you create a unique and project specific Completion Protection Exemption Certificate. More information about our service will be available shortly.
You know that we can also help with building permit drawings , construction drawings and energy calculations .