ARE Live: Construction & Evaluation Mock Exam | ARE 5.0 CE Exam

[@BeeRiley11]

Could someone clarify on question 4a - if there are remaining punch list items to be completed that are actively holding up the Owner obtaining an occupancy permit, why wouldn't that be grounds to withhold payment? If the outstanding punch list items are preventing the Owner from using the building, it seems like they may pertain to bigger issues than simple scuff marks or things that need to be cleaned up (like what I would expect from a typical punch list) and that the issues with the project go deeper than simple Owner dissatisfaction. Based on that additional bit of info, it seems like the Contractor hasn't fully completed the project/reached substantial completion and isn't holding up their end of the bargain?

[@arielwalden4963]

I don't know that you still want a response but... The most basic reasoning why you would not be withholding the payment is that the question prompt never says that the Work being covered by the Certificate for Payment is not "to the Architect's best knowledge" complete, in accordance with Contract Docs, etc, nor does it say that any previously paid work has been found to be incomplete or not in accordance with Contract Documents. It isn't stated that the Payment is covering the not yet completed work of the punch list, so those items aren't the ones paid for. Regarding your questioning withholding payment because of the ongoing dispute, basically the grounds of the dispute given in the prompt is simply conjecture (it says nothing about the Architect's or IDM's thoughts on the quality of work particularly nothing about the work not being in accordance with Contract Documents), so not paying would give the Contractor cause to stop the work and when you're that far behind schedule that is only going to make things worse. So, while the Owner may be right, as they explain with how D was not correct, the dispute needs to go through the proper resolution path (IDM, Mediation, then Arbitration or Litigation) but while that is being figured out the work still needs to be completed, so as they say in the discussion the Owner needs to pay the Contractor to keep them from stopping the work. If the Owner is justified, they will ultimately get their money back (or more likely the work fixed at no cost to them), but you don't want to advise them to do something that WILL cause them more (because if they don't pay the Payment now, it is not only potentially incurring interest charges on the late payment, which is the reasoning they gave in the video, it would also cost $ if the Contractor stops work because they would have to pay the Contractor for the overhead and costs for the time the work was stopped, and at the same time they would still be losing money because the project continues to not be finished). Hope that helps.