Practical completion is the term used for the final progress stage of your renovation project. This stage marks the conclusion of the building works. Leading up to this time, your builder will give notice advising a date for the final inspection of the works.
At this time you and your builder will come to a mutual agreement that the works have been completed in accordance with the building contract, plans, specifications and relevant statutory requirements, either:
- Without any minor defects or minor omissions; or
- Apart from minor defects or minor omissions; and
- Your home is reasonably suitable for habitation
Following the inspection, your builder will give you a Certificate on Practical Completion. Here you can list any agreed and/or non-agreed minor defect or minor omission items (e.g. paint touch-ups) to be rectified within an arranged timeframe.
If you agree the works have reached practical completion, you will sign the Certificate and pay the final progress claim in accordance with your building contract.
Your payment of the final claim is deemed conclusive evidence of the discharge of your builder’s obligations relating to the contract works. Therefore, ensure you do not pay the final claim until all building works have been completed.
Don’t agree with your builder?
Should you not agree that practical completion has been reached, you may give your builder written notice. Within five working days of receiving the Certificate on Practical Completion, your notice will need to state:
- Your requirements for the works to reach practical completion, and
- The provisions of your contract that relate to each requirement
Your builder is obliged to complete your requirements, which in the opinion of the builder, are deemed necessary to reach practical completion.
You will then receive a further Certificate with a new date of practical completion, of which you will pay the final claim.
An important point to remember following practical completion:
After this time, risk of the works transfers back to you. Your builder will cease to be responsible for any loss or damage to the building works. Therefore, make sure you review your home building insurance policy to ensure adequate coverage to your newly renovated home.
