Handover/Practical Completion

Handover, also known as practical completion, is a huge milestone in your build. However, you may be surprised at how many steps both you and the builder need to take in order for your project to be handed over to you. When your construction project reaches practical completion, it essentially means that the work outlined in your contract, including the plans and specifications, has been largely completed. Yet, minor defects or omissions that do not significantly impact the usability or occupation of the building may still exist. It’s important to prepare for this nuanced stage thoroughly. The practical completion phase involves a detailed checklist to ensure everything is in order. Firstly, your builder will issue a Notice of Practical Completion, signaling that the work is ready for your inspection. Alongside this notice, a defects document is typically provided. This document lists minor defects or omissions that both you and the builder agree need addressing. For instance, paint touch-ups or fixture alignments may be noted for correction. Once you receive the Notice of Practical Completion, it’s standard to conduct a final walkthrough of the property together with the builder. This walkthrough is crucial as it allows you to verify that all agreed-upon work has been completed to your satisfaction and that the minor defects listed are accurate. You may wish to engage an external building inspector at this stage to ensure an unbiased and thorough inspection. After confirming practical completion, the final invoice from the builder is due for payment. It’s critical to make this payment promptly, as builders are generally not obliged to hand over the property keys until full payment is received. Remember that you’ve been working with construction loans and progress claims, and this is the final drawdown stage where your loan converts to a standard mortgage. As you step into practical completion, ensure that your insurance is updated to reflect that you are now responsible for the property. This includes adjusting your builder’s insurance and taking up homeowner’s insurance. From here onwards, the defects liability period begins, typically lasting six months. During this period, builders are obliged to fix any minor defects or issues that arise after occupation. Understand that handover is more than just receiving the keys. It’s a comprehensive process to ensure your new build is safe, fully functional, and up to the agreed standards. By meticulously following the steps, from issuing and responding to the Notice of Practical Completion to updating your insurance, you set the foundation for enjoying your new home without unwelcome surprises.