The Fit-Out Is Done. You’ve Moved In.Now Here Is What Most Companies Get Wrong.
- UODC Architects Marketing
- 9 minutes ago
- 8 min read
Handover day feels like the finish line. For experienced corporate teams, it is not. It is the start of a 12-month accountability window that determines whether the problems in your new office get fixed for free — or at your own cost.
The team has moved in. The boxes are unpacked. Leadership has done the walkthrough and declared it a success.
Then, three weeks later, the air conditioning in the boardroom struggles to keep up on a full-occupancy day. A partition wall has a hairline crack running from floor to ceiling. The pantry tap drips. Two data points in the open-plan area are not working. The floor tiles in the reception have a slight unevenness that nobody noticed on handover day but that catches the eye every morning.
Every one of those issues is the contractor’s responsibility to fix at no cost — if the company knows what rights it has, and if those rights were properly secured before the handover was accepted.
Most companies do not know. And contractors are rarely in a hurry to remind them.0
70% | of corporate tenants in the Philippines report at least one significant defect in the first three months of occupying a newly fitted office. Fewer than half of them successfully recover rectification costs from their contractor because they did not have the right documentation in place at handover. (Source: industry research, Metro Manila commercial fit-out sector, 2025–2026) |
Section 1
What the Defect Liability Period is — and why it matters
The Defect Liability Period (DLP) is a window of time after handover during which your contractor is legally obligated to fix defects in their workmanship and materials at no additional cost to you.
It is not a goodwill gesture. It is a contractual obligation. But it only applies if it was included in your contract, if the defect falls within its scope, and if you report the defect in writing within the agreed period.
The typical DLP for a Philippine corporate fit-out is six to twelve months. Some contracts specify different periods for different systems: twelve months for general works, longer for waterproofing, and manufacturer-warranty periods for HVAC and electrical equipment.
ITEM | DLP PERIOD | SCOPE |
General workmanship | 6-12 months | Partitions, ceilings, finishes, joinery, painting |
Waterproofing | 12-36 months | Wet areas, pantry, toilet floors, roof if applicable |
Electrical systems | 12 months | Panels, wiring, switches, lighting fixtures |
HVAC systems | 12 months | Fan coil units, ductwork, controls |
Plumbing | 12 months | Pipes, fixtures, drains, water connections |
Equipment (manufacturer) | 12-24 months | Per individual equipment warranty cards |
Structural works | 15 years (PD 1096) | Load-bearing elements per Philippine Building Code |
CRITICAL POINT If your contract does not name a DLP, you may still have rights under the Civil Code of the Philippines (Articles 1566–1571 on hidden defects, and Article 1723 on contractor liability for building defects). But enforcing these without a clear contractual DLP is harder, slower, and more expensive. Always ensure the DLP is explicitly stated in your fit-out contract before work begins — not after problems appear. |
Section 2
How to classify a defect — and why the category determines everything
Not all defects are equal. How a defect is classified determines how urgently it must be fixed, whether it prevents you from using the space, and how you should document and escalate it.
■ CATEGORY A — Critical — Must be resolved before or immediately after occupation What it covers: Defects that affect safety, structural integrity, or prevent normal use of the space Examples: Non-functioning fire suppression, electrical faults creating shock risk, HVAC failure in a fully occupied floor, water ingress affecting workstations Expected response: Immediate written notice to contractor. Rectification within 24–48 hours. If not resolved, escalate in writing and document all costs of temporary measures. |
■ CATEGORY B — Significant — Does not prevent occupation but requires prompt rectification What it covers: Defects that affect performance, comfort, or function but do not create immediate safety risk Examples: HVAC underperforming in one zone, data points not working, door that does not close properly, acoustic partition with gaps Expected response: Written defect report within 5 business days of discovery. Contractor response and rectification plan within 5 business days. Reinspection after rectification, documented in writing. |
■ CATEGORY C — Minor — Cosmetic or low-impact, addressed during the DLP What it covers: Cosmetic imperfections and minor items that do not affect function or comfort Examples: Paint touch-ups, minor floor tile unevenness, small gaps in joinery, scratches on glass surfaces, minor grout inconsistencies Expected response: Logged in a running defect register. Addressed in batches during scheduled contractor visits within the DLP. All Category C items must be resolved before the DLP closes. |
Section 3
The documents you must have at handover — and what happens if you don’t
Handover is not just a key handover. It is a document handover. The paperwork you receive at handover determines your ability to maintain, modify, and protect your office for the entire lease term.
1 As-built drawings
These show where everything actually ended up in the finished build: partition locations, MEP routes, cabling paths, drainage runs, and structural elements. Design drawings show what was planned. As-built drawings show what was built. Without them, any future renovation, repair, or reconfiguration requires your contractor to open walls and ceilings to find out what is inside. That process costs money you should not have to spend. Insist on receiving as-built drawings within 14 days of handover. Do not release final payment until they are in your hands.
2 Equipment manuals and warranty cards
Every piece of installed equipment — HVAC units, electrical panels, access control systems, CCTV, AV equipment, and pantry appliances — comes with a manufacturer’s warranty. That warranty is yours. It travels with the equipment, not the contractor. But you can only claim it if you have the warranty card, the serial number, and the installation date. Collect these at handover and store them in a single folder that your facilities team can access at any time.
3 Statutory certificates and clearances
Your Certificate of Occupancy from the LGU, building management sign-off on fit-out completion, fire safety inspection certificate from the BFP, and any PEZA clearance if applicable. These are not administrative formalities. They are the legal basis on which your tenancy and operations are permitted. Without them, your occupation of the space has no formal standing — a problem that surfaces during audits, insurance claims, and lease renewals.
4 The signed snag list and its resolution record
The pre-handover snag list — the written record of every defect identified before you accepted handover — must include a resolution record: what was fixed, when, and by whom. This document is your evidence that issues were raised and resolved before occupation. Without it, any defect that appears later becomes a dispute about whether it was pre-existing or appeared after move-in.
5 The DLP start date and expiry date, confirmed in writing
Your DLP runs from the handover date, not from the construction start date or the date you signed the contract. Confirm the start and expiry dates in writing from the contractor within five days of accepting handover. This prevents any future disagreement about when the window closes — and when defects are no longer the contractor’s responsibility.
Section 4
How to run the first three months of occupancy
The first 90 days in a new office are the highest-risk period for defect discovery. Your team is using the space at full load for the first time. Systems that performed under construction conditions are now running under real operational conditions. Problems that were invisible on handover day become visible within weeks.
✓ Appoint a single person to manage the defect register. This does not need to be a full-time role. It needs to be one person who collects all defect reports from the team, logs them in a shared document, and communicates them to the contractor in writing. When 30 people report issues through 30 different channels, nothing gets tracked and nothing gets fixed.
✓ Log every defect the day it is discovered. Date, location, description, and a photograph. That record becomes your evidence if the contractor disputes whether the defect appeared within the DLP. A defect reported in month six with no prior documentation is harder to enforce than one logged on the day it appeared
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✓ Send defect notifications in writing, not by phone. A phone call to the project manager is not a formal defect notification. An email or written notice with the defect details, location, and date is a formal notification. The contractor’s DLP obligation is triggered by written notice. Verbal reports create no legal record and no response deadline.
✓ Schedule a 30-day post-occupancy review with your contractor. A structured walkthrough one month after move-in, with both teams present and a shared defect list being updated in real time, resolves the majority of Category B and C items before they become entrenched. A contractor who refuses to attend a 30-day review is telling you something about how they intend to manage the DLP.
✓ Track HVAC performance separately from the general defect log. Air conditioning is the single most common source of post-occupancy complaints in Metro Manila offices. Temperature variations between zones, humidity problems in the rainy season, and noise from fan coil units all appear after full occupation. Document HVAC issues with dates, times, zones, and temperature readings where possible. This specificity makes rectification faster and disputes less likely.
Section 5
What to do when your contractor stops responding
It happens. The project is delivered, the final payment is close to being released, and the contractor’s responsiveness drops sharply. Calls go unreturned. Site visits get rescheduled. The defect register sits unaddressed.
This is the moment most companies either give up or spend money fixing the defects themselves. Neither is the right response.
✓ Do not release retention money until defects are resolved. Most fit-out contracts include a retention clause: a percentage of the final contract value (typically 5 to 10 percent) held back until the DLP closes and all defects are resolved. This is your most powerful lever. Do not release it early as a gesture of goodwill. It is the contractor’s financial incentive to return and finish the job.
✓ Send a formal written notice with a rectification deadline. Not a follow-up call. A letter or email on company letterhead addressed to the contractor’s principal, listing every outstanding defect, citing the DLP clause in the contract, and stating a specific deadline for rectification. Copy your lawyer if the contract value warrants it. The tone of the contractor’s response will tell you what level of escalation is needed.
✓ Document every cost you incur as a result of unresolved defects. If a non-functioning HVAC unit forces you to hire portable cooling at ₱15,000 per unit per month, that cost is recoverable from the contractor if the defect falls within the DLP. Keep receipts and document the connection between the defect and the cost. That paper trail is your basis for recovery.
✓ Know that you have legal recourse beyond the DLP. Even after the DLP closes, the Civil Code of the Philippines provides protection against hidden defects (Article 1566) and contractor liability for structural failures (Article 1723, which covers 15 years for structural defects). These are not easy claims to pursue, but they exist. A property lawyer’s advice on the strength of your position costs far less than paying to fix what should never have been your problem.
When your fit-out contractor handed over the keys, did they also hand you everything you need to hold them accountable for the next twelve months?
TALK TO UODC ARCHITECTS
We build fit-out contracts with clear DLP terms, structured handover documentation, and a 30-day post-occupancy review built into every project — so our clients are protected long after move-in day.
Book a Free Consultation → www.uodc-architects.com/start-your-project
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