Practical advice for your Practical Completion Inspection in Geelong

The Practical Completion Inspection aka ‘PCI’ happens when a new home build is considered to be ‘practically complete’. Always refer to your specific building contract on the handover process however the formal process should typically consist of the Notice of Completion being issued, then the final claim issued (only once occupancy permit/certificate of final inspection has been provided). The PCI is a critical part of the contractual process where the homeowner has the opportunity to identify any defects, incomplete work, or issues that need addressing before the project is handed over to the homeowner for occupancy.

There can be confusion or miscommunication by both the builder and the homeowner at the pointy end of the build. Builders may refer to the PCI as a Final Inspection, Final Walkthrough, New Home Presentation (NHP) or a casual on-site catch-up. It is important to confirm with the builder that this inspection is indeed the formal ‘defects’ inspection as it holds significant contractual importance; the formal opportunity for to inspect the property and submit the final list of defects. Sometimes the builder can downplay the importance of the PCI to be more of an informal walkthrough of the home, however if items are not listed on the final defects list, they are not a formal/contractual defect.

It is common for builders to schedule the PCI while there are important elements of the build that are not yet complete. If the PCI occurs prematurely, the homeowner won’t have the opportunity to check any incomplete items. This can be even more prevalent when the prospect of handover in the lead up to festive times of the year, end of financial year, or holiday periods is used as an incentive, despite the home not being practically complete. This is often when supervisors are under pressure to finish their projects and reach their targets and KPIs so builders can receive the final payment.

 

What should I do if the builder is requesting a PCI, but the house is not complete?

1. Familiarise yourself with the final process that is set out in your building contract and do not deviate from it. Be sure to check the special conditions as the process can be explained here also. It may flag that “appliances, hot water service, air conditioner not completed/installed due to theft.” Submitting the final defects list is a significant part of the contractual process.
2.  The Occupancy Permit typically triggers the Final invoice and Notice of Completion. The builder should issue the Notice of Completion and “Final” invoice, indicating the house is completed as per the plans and specifications before inviting the homeowner to complete their PCI.
3. The process set out in the contract is there to protect you and the builder – follow it.
4. If the house is not ready, we recommend postponing and rescheduling the PCI for when it is practically complete. It is also critical that the house is clean so that it is safe, and so aesthetic defects such as chips and scratches can be identified.

We always we recommend staying strong and sticking to the above process will ensure the best outcomes with the build. This can be difficult particularly when homeowners are desperate to move in due to living arrangements, build time blow-outs or financial strain. In these situations, we advise clients to try not to let the builder know of your situation so that they cannot take advantage of it. Often homeowners who desperately need/want to move in (for whatever reason) end up compromising and accepting building defects that should have otherwise been fixed in lieu of waiting for them to be fixed.

 

When should I book in my independent final or handover inspection?

1. Once the Notice of Completion and Occupancy Permit has been issued.
2. Ideally 2-3 days before your PCI. This will ensure you have the independent report in hand for your own inspection to discuss items with the builder as well as add any of your own items to this list, before submitting it as part of your formal defects list.
3. Please keep in mind Manse Group requires 5 days’ notice for all inspections.
4. Sometimes builders try to request the independent/private inspection before the house has reached practical completion so they can use the independent report in lieu of completing their own quality checks. This means that incomplete items cannot be properly assessed. Therefore, it is always in the homeowner’s best interest that the house is clean and practically complete prior to the independent inspection.

 

My builder is pressuring us to pay the final invoice, what are my rights?

There are some important things to keep in mind regarding making your final payment:

1. The final invoice should not be issued unless the Occupancy permit/Final certificate has been issued. The notice of completion should not be issued unless it has reached completion. Some important definitions typically used in contracts:
   • ‘Notice of Completion’; “a notice given by the Builder pursuant to Clause 36 informing the Owner that the Building Works have reached Completion.”
   • ‘Completion’; “that the Building Works to be carried out under the Contract have been completed in accordance with the Plans and Specifications set out in the Contract.”
2. The final payment is not due until the builder notifies the homeowner in writing that all the items on the defects list have been rectified and handover takes place. Common processes and wording we see in contract include;
   • If the Owner gives the Builder a list of known defects and incomplete work the Builder must carry out the work required to rectify any defects or do any incomplete part of the Building Works for the Building Works to reach Completion.
   • The Builder is to give the Owner a written notice when the work (list of defects) has been completed.
   • Payment can then be finalised and handover process proceeded with.
3. We always advise not rushing for handover, you’ve come this far, stay strong and ensure you’re getting what you’ve paid for. It is important that all the defects are re-checked by the homeowner, and an independent re-inspection of the defects is completed.
4. If significant defects remain and the contractual process has not been complied with, we advise to obtain legal advice on your next best steps.
5. Builders can suggest that they can fix some items at the maintenance stage, but this can often be a battle, not to mention it’s inconvenient trying to arrange trades to attend your house at certain dates and times, so it’s always in your best interest to get items sorted before handover.
6. Once items on your defects list have been attended to, payment can be finalised and the  handover process can take.

The Practical Completion Inspection represents a pivotal contractual milestone in the building process. It is essential that homeowners approach this stage with diligence and patience. Proceeding with a PCI prematurely, or outside of the contractual process leaves homeowners at risk of having to accept defects with their new home build.

Staying firm, sticking to the facts and following the process outlined in the building contract, homeowners can safeguard their new home and investment, and ensure a smooth handover experience.

 

Need help with your PCI?

• Read our PCI Guide for Homeowners.
• Check out our End of Build Checklist for more helpful advice and your build nears completion.
• Contact our friendly team for independent support and inspection services.

Let us help ensure your home in the Geelong area meets the minimum standard for quality and workmanship before you take the keys.

The above is general advice only. Each contract and build is different, so always ensure you refer to the specific contract conditions. This is not legal advice; if you need legal advice, contact a legal professional.