A vesting certificate is a document confirming that ownership of specified goods or materials has passed (vested) to the client once they have been paid for, even though they have not yet been delivered to site.
Vesting certificates are most often used when a client pays in advance for materials or prefabricated components stored off site, such as steelwork or precast units. They identify the items paid for and give the client evidence of ownership if the contractor becomes insolvent before delivery, which helps to resist competing claims from third parties. They cannot, however, override a supplier’s valid retention of title, so the client should check that the contractor actually owns the goods. Under JCT, payment for such off-site “listed items” usually also requires the goods to be:
- clearly set apart and marked as destined for the project
- insured against loss while off site
- supported by a bond where the contract requires one
Related terms: off-site materials, listed items, retention of title.
