Most of your logged hours sit in the middle of a project. Design, construction documents, coordination, the long grind of getting a set ready to build. That is where interns spend their time, and it is where the ExAC experience areas put the most weight.
The ExAC has a habit of testing the two ends instead. The security an owner takes before the first shovel goes in the ground, and the money and documents that change hands after the last deficiency is fixed. Bonds, holdback, and closeout. You touch them rarely as an intern, which is exactly why they are easy marks to lose.
Here is the simplest way to hold all three in your head:
- Bonds protect the owner at the front end.
- Holdback is a safety net that runs the whole way through.
- Closeout is the long tail at the back end, where the money finally gets released and the paperwork lands.
Once you see them as the bookends of a contract rather than three unrelated topics, the exam logic gets a lot simpler.
First, two contracts are running at the same time
This is the frame that makes everything below easier to read. On a typical building project there are two separate agreements in play, and they govern different relationships.
- CCDC 2, the Stipulated Price Contract, is between the owner and the contractor. This is where the bonds, the holdback, substantial performance, Ready for Takeover, and the certificates for payment live. For the full suite of CCDC documents, see our CCDC contracts cheat sheet.
- RAIC Document Six, the Canadian Standard Form of Contract for Architectural Services, is between the client and the architect. This is where your duties to administer all of the above are defined, through the Schedules of Architect's Services.
The Canadian Handbook of Practice puts it plainly: the scope of the architect's work during construction is set by both the construction contract (CCDC 2) and the client and architect agreement (RAIC Document Six). So the machinery sits in CCDC 2, and your job description for operating it sits in Document Six. Keep that split in mind and the rest falls into place.
Bonds: security at the front end
In plain terms: a bond is a financial backer standing behind the contractor.
A bond is a three party promise. The contractor is the principal, the owner is the obligee, and a surety (usually a specialty arm of an insurer) stands behind the contractor. If the contractor fails to do what it promised, the surety answers to the owner.
One thing trips people up: a surety bond is not insurance. It is closer to a line of credit. The surety expects to be paid back by the contractor for anything it pays out, so getting bonded is really a measure of the contractor's financial strength. That is the whole point of asking for one. A bond is the owner's evidence that a third party with money on the line has vetted the contractor.
There are three standard forms, all published by the Canadian Construction Documents Committee and refreshed in 2024, the first update since 2002:
- CCDC 220, Bid Bond. Submitted with the tender. It guarantees that if the bidder wins, it will sign the contract and provide the other required security. If the winner walks away, the surety covers the gap, usually the difference between that bid and the next acceptable one. The penalty is typically around 10 percent of the bid.
- CCDC 221, Performance Bond. Issued after award. It guarantees the contractor will complete the work. If the contractor defaults, the surety can finance the original contractor to finish, arrange a replacement, tender the remaining work, or pay out the penalty. Coverage is normally 50 or 100 percent of the contract price.
- CCDC 222, Labour and Material Payment Bond. The companion to the performance bond. It guarantees that subcontractors and suppliers get paid, which protects the owner from liens further down the chain. Coverage usually matches the performance bond at 50 percent.
Where the architect fits
In contract administration the architect obtains the bonds and insurance certificates from the contractor before construction starts and forwards them to the owner. You are confirming the security exists and is in the owner's hands. You are not the one underwriting it, and you do not guarantee the contractor's performance. The surety expects the contractor to reimburse anything it pays out, so a bond mostly reflects the contractor's financial standing, not the architect's judgment.
Holdback: the safety net that runs the whole way through
In plain terms: holdback is money the owner keeps back from every payment, as a cushion against unpaid subtrades and unfinished work.
Every province requires it under lien legislation, though the exact mechanics vary. In Ontario, under the Construction Act, the owner must retain a basic holdback of 10 percent from the value of every payment certified to the contractor. That money is not the owner's to spend. It accrues cumulatively as work proceeds and is held for the benefit of everyone further down the payment chain who might otherwise be left unpaid if the contractor runs into trouble.
For the full progress-claim math, the schedule of values, and how a certificate for payment gets built line by line, see our guide to applications for payment and holdback. This article picks up where that one leaves off: what releases the holdback, and what comes after.
The lien clock, and why the architect starts it
Holdback is released after the lien period expires, assuming no liens have been registered. In Ontario the clock runs like this:
- The architect issues the Certificate of Substantial Performance and it is published.
- Lien claimants have 60 days from publication to preserve a lien, meaning register it on title.
- They then have a further 90 days, after the last day the lien could have been preserved, to perfect it, meaning start a court action.
- If nothing is registered, the basic holdback can be released.
Notice who starts that clock. The architect's certificate is the trigger. That is real authority, and it is why the timing of substantial performance shows up so often on the exam. A separate, smaller finishing holdback follows the same pattern after Total Completion, released once its own lien period expires.
Prompt payment, and the 2026 change
Layered on top of all this is Ontario's prompt payment regime: once the owner receives a proper invoice it has 28 days to pay the contractor, who then has 7 days to pay its subcontractors, and so on down the chain, with disputes going to fast track adjudication through ODACC rather than straight to court. CCDC 2 (2020) was rewritten to line up with these timelines. See the payment and holdback guide linked above for the full day-by-day breakdown.
A current change worth knowing, because the exam keeps pace with the codes: effective January 1, 2026, Ontario made annual holdback release mandatory on all contracts, under amendments the Fighting Delays, Building Faster Act, 2025 made to the Construction Act. It used to be optional and limited to very large projects. Now, on each anniversary of the contract date, the owner publishes a notice and releases the accrued holdback, which then starts building again from zero for the next year. Our roundup of what changed for 2026 tracks this kind of update.
Project closeout: the long tail at the end
Here is the misconception that costs marks: people treat substantial performance as the finish line. It is not. It is the point where the building is ready to be used for its intended purpose and the cost to finish the leftover work falls under a prescribed threshold. There are almost always deficiencies still on the list at substantial performance. Closeout is the sequence of milestones that takes you from usable to finished and signed off.
Under CCDC 2 (2020), the closeout sequence has three steps worth separating cleanly.
| Milestone | CCDC 2 (2020) reference | What it triggers |
|---|---|---|
| Substantial Performance of the Work | Defined by lien legislation; payment under GC 5.4 | Release of the basic holdback; start of the lien period |
| Ready for Takeover | GC 12.1 | One year warranty; insurance period; Contract Time end date; indemnification; waiver of claims |
| Total / Final Completion | Final certificate for payment | Release of the finishing holdback; final payment |
1. Substantial Performance of the Work
Defined by the applicable lien legislation, not by the contract itself. This is the milestone that releases the basic holdback and starts the lien clock described above. The architect certifies it. Deficiencies are expected and get tracked on a list to be completed or corrected.
2. Ready for Takeover
This is the milestone most older study material misses, and it is a favourite for a tricky question. CCDC 2 (2020) introduced Ready for Takeover, General Condition 12.1, as a new milestone that comes after substantial performance and before total completion. Before declaring it, the consultant confirms a set of conditions, including:
- Substantial performance has been certified.
- Evidence of compliance for occupancy, or an occupancy permit, is in hand.
- Final cleaning and waste removal are done.
- Operations and maintenance documents have been delivered to the owner.
- As built drawings are delivered to the extent completed.
- Start up testing is complete.
The contractor applies for it and the consultant has 10 days to respond. Ready for Takeover is now the trigger for the Contract Time end date, the one year warranty, the insurance period, indemnification, and waiver of claims. All of those used to hang off substantial performance.
There is also an early occupancy path. If the owner takes possession of part of the work before Ready for Takeover, that part is deemed taken over, responsibility for its care passes to the owner, and the warranty period for that portion starts from the occupancy date.
3. Total Completion and final payment
The last rung. The finishing work is done, the architect carries out the final review, the finishing holdback is released, and the final certificate for payment is issued. Record drawings get finalized if the contract calls for them.
The closeout document turnover
Closeout is as much an administrative event as a physical one. Before final payment the architect collects the documents the owner will live with for years afterward. Drawing on the OAA's Mastering the Business of Architecture, the turnover bundle typically includes:
- Warranties and guarantees
- Certificates of inspection from authorities
- Equipment and operations manuals
- WSIB clearance certificate
- Operating instructions and system demonstrations
- Statutory declarations confirming accounts are paid (CCDC 9A)
- Keying schedules and maintenance stock
- As built or record drawings
A useful instinct on the exam: if a question asks what is missing or out of sequence at closeout, scan for one of these documents being released before it should be, or final payment being issued before the package is complete.
One terminology trap that follows you into closeout
Throughout construction and closeout the architect performs field review, which RAIC Document Six calls general review, and the two terms mean the same thing. You visit the work at intervals to determine whether it is in general conformity with the construction documents, and you report in writing. You do not inspect, and you do not supervise. Those two words describe a level of service the architect does not provide, and they belong to the contractor. Using them in a certificate, a site review report, or an agreement can expose you to liability for work you never undertook. See our full breakdown of general review vs inspection vs supervision for the complete distinction. For the change management documents that run alongside all of this during construction, see our guide to site instructions and the change hierarchy.
How this shows up on the ExAC
This material lives in Section 4 territory and the contract administration themes. The questions tend to cluster around a handful of distinctions:
- Bid bond percentage versus performance bond percentage. Roughly 10 percent of the bid for a bid bond, 50 or 100 percent of the contract for the performance bond. Mixing these up is the classic error.
- Which bond protects whom. Bidder backing out, contractor not finishing, or subs not getting paid.
- Calculating holdback. Accrued holdback is 10 percent of work certified to date. Released holdback is the basic pool at substantial performance, then the finishing pool at completion.
- Substantial performance versus Ready for Takeover. What each triggers, and the fact that holdback stays with substantial performance while warranty moved to Ready for Takeover under CCDC 2 (2020).
- The lien timeline. 60 days to preserve, 90 days to perfect, and the architect's certificate as the starting gun.
- Field review, not inspection or supervision.
If you are licensing in Ontario, you will meet every one of these again in the OAA Admission Course, which is mandatory for licensure and runs through eight modules on the regulatory and legal side of practice. The Construction Act, professional liability and architect contracts, bid theory and practice, and contract administration and general review all map straight onto this article. The OAA describes the Admission Course as a practical foundation rather than an exam prep course. The ExAC tests the national concept; the Admission Course grounds it in how Ontario actually runs. They reinforce each other.
To fold this into your prep, slot the contract administration material into the back half of your 12 week study schedule, then drill the numbers with the CCDC cheat sheet and the flashcards, which cover bonds and key timelines.
The numbers worth memorizing
- Bid bond: about 10 percent of the bid price
- Performance and L&M payment bonds: 50 or 100 percent of the contract price
- Basic holdback: 10 percent of each payment
- Lien preservation: 60 days; perfection: a further 90 days
- Prompt payment: owner pays within 28 days of a proper invoice, then 7 days down the chain
- Ready for Takeover: consultant responds within 10 days of the application
- Warranty: one year, running from Ready for Takeover under CCDC 2 (2020)
- Annual holdback release: mandatory on all Ontario contracts as of January 1, 2026
The full picture is in the study guide
Bonds, holdback, and closeout sit inside Theme 9 (Bidding & CCDC Contracts) and Theme 10 (Construction Administration) in our ExAC study guide. For the payment cycle that drives holdback accrual, read our guide to applications for payment and holdback. For the change management documents that run alongside closeout, see site instructions and change directives.
Open the free study guide preview →Primary references
- Canadian Construction Documents Committee, CCDC 220, 221, 222 (2024) Bond Forms
- Royal Architectural Institute of Canada, Canadian Standard Form of Contract for Architectural Services, Document Six (2017)
- Royal Architectural Institute of Canada, Canadian Handbook of Practice, Chapter 6.5 (Construction Procurement), Chapter 6.6 (Contract Administration), and Chapter 6.7 (Takeover and Commissioning): chop.raic.ca/chapter-6.6
- Ontario Association of Architects, CCDC 2 (2020) overview of changes, practice tip
- Ontario Association of Architects, Admission Course modules: oaa.on.ca
- Construction Act (Ontario), as amended by the Building Ontario For You Act, 2024, and the Fighting Delays, Building Faster Act, 2025 (changes effective January 1, 2026)