Handover: the defects list decides the last payment

Practical completion is a moment with legal consequences: risk moves, retention reduces, the defects period starts and the warranties begin running.

Most of what a developer can still insist on has to happen in the weeks around it.

Practical completion is a definition, not an opinion

The contract defines it, usually as a state where the building can be used for its intended purpose despite minor outstanding items.

Reading that definition before the inspection prevents an argument in which both sides mean different things by the same phrase.

Inspect with somebody independent

A developer walking a building with the builder finds fewer defects than an independent inspector with a checklist does.

The cost of that inspection is small against the retention it protects, and the report carries far more weight in any dispute.

Photograph everything, with dates

A defect list without pictures becomes an argument about whether the mark was there at handover or arrived with the occupants.

Dated photographs settle that in seconds. Our guide to photographs on a job covers capturing them usefully.

Separate defects from variations

A defect is work that does not meet the contract. A change of mind is a variation, and the builder charges for it.

A list mixing the two invites the builder to dispute all of it, so keeping them apart protects the genuine items.

Retention exists for exactly this

The retained amount, or the bank guarantee behind it, is the only pressure a developer still holds once the builder has gone.

Releasing it before the builder rectifies the defects gives that up, and goodwill makes a poor substitute.

The defects liability period has a deadline

Most contracts give a defined period, often twelve months, and items reported inside it are the builder's obligation to fix.

A reminder at nine months, prompting a proper reinspection, catches the problems that only appear after a building has been used.

Some defects only appear in weather

Waterproofing, drainage and facade sealing often behave perfectly until the first heavy rain from a particular direction.

A reinspection after the first serious weather event is worth booking deliberately rather than waiting for a complaint.

Certificates and manuals are part of completion

Occupation certificates, compliance certificates, warranties, operating manuals and as built drawings all form part of what the builder owes.

Withholding a portion of the payment until those arrive is normal, and it is far more effective than asking afterwards.

Purchasers will find what an inspection missed

New occupants use a building in ways no inspection replicates, and their reports are genuinely useful information.

A simple way for them to report an item, with a response, prevents a frustrated owner going straight to a lawyer or a regulator.

Structural warranties run far longer

Statutory warranty periods for structural defects run well beyond the contractual defects period, and the length differs by state and by the kind of defect.

Confirming those dates for the state, and recording them per building, is what turns a late discovery into a claim rather than a loss.

Hand the building over to somebody

A completed building needs somebody responsible for it from the day the builder leaves. A manager, an owners corporation or the developer.

A gap there produces small problems nobody attends to, and the first owners arrive holding those as complaints.

Close the file properly

The defect list, the photographs, the correspondence and the certificates all matter if a structural claim arrives years later.

A complete file, held where somebody can find it in five years, is the last and cheapest piece of risk management on the project.

What to change first

• The contract's definition of practical completion gets read before the inspection
• An independent inspector walks the building
• Every defect carries a dated photograph
• Defects and variations stay on separate lists
• Retention stays held until rectification, not until goodwill
• A reminder at nine months prompts a reinspection
• Certificates, manuals and as built drawings arrive before final payment