Handover is important for performance of the works and generally also for the entitlement to payment. The transfer of ownership and risk of damage, however, depends on the contract and the regime under § 542 and § 554 of the Commercial Code; the employer may already own the works during construction. A warranty period is relevant if the contractor has assumed a quality warranty. At either party’s request, a written handover record must be made, recording identified defects and reservations.
What does handover mean?
The contractor fulfils its obligation by properly completing and handing over the works (§ 554(1) of the Commercial Code). Ownership and the risk of damage must, however, be assessed under the contract and § 542: where works are carried out on the employer’s land, the employer may already own them and bear the risk of damage during construction. If the contractor owned the completed item and § 554(5) applies, ownership passes to the employer on handover together with the risk of damage, unless that risk passed earlier. A quality warranty does not arise automatically from handover itself; if the contractor has assumed one, the running of the warranty is assessed under § 563 and the warranty agreement.
Is a handover record required?
If either party requests it, a written record signed by both parties must be made of the handover (§ 554(6)), known in practice as the handover record. It should include the condition of the works, identified defects and outstanding work, the agreed deadlines for remedying them and any reservations made by the employer. If the contract requires proper performance to be demonstrated by tests, the works are considered complete only once those tests have been passed, with a written record also being made (§ 555(2)).
Why does the handover record matter?
Without a record containing reservations, defects are difficult to prove after acceptance. Handover is relevant to the periods for notifying defects and, where a warranty has been assumed, also to the start of that warranty. The employer is also entitled to inspect the works during construction and require defective performance to be remedied (§ 550). The contractor’s entitlement to payment generally arises upon performance of the works (§ 548), so the handover date also affects payment.
Practical recommendation
We recommend agreeing the acceptance procedure in advance (dates, tests and the list of documents) and accepting the works with professional supervision to record defects. We arrange contracts and assistance at handover through legal services for construction companies and construction contracts; construction project coordination covers the technical and legal management of the project.
This answer provides general information on the law as at 10 September 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
