Practical Completion (PCI)
The building contract usually defines practical completion as when all works are completed except for any defects or omissions which do not prevent the home from being used for its intended purpose, (a definition is in the Home Building Contracts Act, Section 11. Defects, implied condition as to liability for). In other words, if the unfinished items prevent the home from being “lived in” then practical completion could be deemed not to have occurred.
Usually there will be a practical completion inspection and the building supervisor and client will agree on a list of items in need of attention. Most home buyers are not fully conversant with Australian Standards, are there any items identified as requiring attention? Do these prevent the house as being reasonably fit for occupation? Areas such as the roof void are not normally accessible by the client and completion of works in this area is vitally important; Is the roof framing complete and structured to Australian Standards? Has exhaust fan venting been completed? The insulation laid correctly? Is plumbing and electrics complete? Are finishing’s to standards?
These are a few of the many items that need looking at to ensure works are completed to the contract, the schedule and to Australian Standards.
By arranging a Housecalls Practical Completion Inspection (PCI) we can provide a detailed report on this important completion stage of the project by identifying any items that require attention.
The builder has a contractual obligation to repair these minor defects, but may be reluctant to complete prior to handover, although most builders would attempt to do so. With this in mind it is important to have the agreed “defective” items attended to prior to the handover point rather than during or at the end of the defects liability period (usually a period of four months after practical completion for many residential contracts and sometimes called the maintenance period).
Identifying and having defects attended too at the PCI stage is important as this gives the builder a clear opportunity to rectify all the items whilst the property is still empty, thereby allowing a speedier completion of works and reduces the list of items along with those that may come to light during occupation and requiring attention at the end of the defects liability period. If a builder is reluctant to attend to items prior to the handover, will they be attended to by the end of the defects liability period?
PCI is an important stage of the building process but buyers must understand that not every last detail may necessarily be completed at this time. In short, at practical completion, the builder is paid in full, the owner takes occupancy and the defects (maintenance) liability period starts. Confusion over this point is common because it is at this point of practical completion that payment of the final progress claim becomes due. The astute client will ensure all “defective” items requiring attention are recorded (our Housecalls Inspection Report) and agreed to by both the builder (building supervisor) and client, then having these attended to prior to agreeing that the “Practical Completion” stage has been reached (we advise clients not to sign until they are positive that the completion stage has been met). Home buyers may want to state that some minor works have not been completed and that they wish to withhold some or all of the final payment until they are completed, such a practice is a contract breach because this is not what has been agreed in the contract, having any issues identified and attended to prior to handover is the right way deal with such situations.
Home owners need to be aware the PCI is not handover and keys are not available until settlement of the account which is normally 10 days after PCI. The builder has an obligation to complete the outstanding items in a diligent and timely manner ensuring the agreed list is completed at handover of the property. It is important not to plan to move until well after PCI as you may be under pressure to accept poor workmanship due to the need for accommodation.
We have the knowledge and experience to assist you through this exiting but sometimes difficult phase of your contract.
“Three things cannot be long hidden: the sun, the moon, and the truth.” Buddha
Have a peace of mind. Be sure to get your future home inspected prior to accepting handover.
Our PCI site inspections are compressive and include:
–Framing and structure
–Exhaust fan extraction
–Electric Meter Box – Installation & Labelling
–Gas Meter Box – Installation & Labelling
–Water meter location
–Hot Water system
External & Internal Doors
– Paint finishing
– Installation and operation
– Doors and frames
– Robes and shelving
Kitchen & Bathrooms
– Cabinetry installation/finish
– Tap & Waste operation
Gas heater points