What did you do?

I've been reading through the handover discussions on whether to accept the keys and make the final payment when there are still faults outstanding or refuse to accept handover until the faults are fixed.

The general consensus seems to be you should wait until everything is completed/fixed before making the payment. And when we recently had our pre-plaster inspection with Kevin, he advised us to do the same thing because once the builders have the cash, there’s no real sense of urgency to fix the faults etc.

However, he also said a common problem is people are often renting and the vacation date they set usually coincides with handover. Therefore, they find themselves under pressure to accept the keys with faults outstanding because they may not have anywhere to live.

We're renting and our plan is to do the sensible thing and wait but given we're required by law to give at least 4 weeks notice before vacating the rental, it's going to be quite tricky in terms of timing.

If we follow this advice and only give notice once everything is fixed , it seems unavoidable that we will have to pay rent even though the house may be ready to move into.

So my question is, even though it’s sensible to wait, how many people actually do?

Mikita, our neighbours to be are in the same position with PD and they are accepting handover tomorrow.... I pity them, they have soooooo many issues but have given notice and have to move out of their rental.

Can you possibly negotiate a supplimental week by week or fortnightly rental agreement with the landlord to tide you over???

I suppose it also depends on what is outstanding and whether you can live with those issues or not??

I say try and wait....

H i mikita i have handover april 7th hopefully if anything needs fixing it will be done before then. But i wont move in for another two weeks after that as i have to have the flooring and driveway completed.

we are renting and have just given notice today . I told the estate agent we will be out on or before April 28th. ..three months before the agreement is due to expire.
So hopefully everything will run smoothly and any issues will be fixed before April 28th ..cross fingers and toes.
So i have given them 5weeks or so to find another tenant.
Financially its hard because im paying interest on the mortgage and rent payments at the same time

To be honest, I think it depends on the issues you have.

We had a problem with a damaged garage door prior to moving in. We had a choice. Either get it fixed by the builder after XMAS, or wait till the new door arrives before moving in.

Wwe got a letter from the builder stating that they accept liability, and that the door would be replaced (it was operational but bent).

Due to XMAS shut down, we got the new door in February. This was all fine with us.

Paying 3 months rent v a warranty covered garage door? I thinkw e chose well.

i agree that people need to be very firm in this isue. We have all seen many a story about pre handover issues. I think that there are things that need to be fixed before handover, and some that can wait till 90 day inspection.

Hi, great topic. We too will be trying to vacate our rental property asap to minimise the period of paying both rent and mortgage. In this scenario refusing handover (except in the case of significant problems) may well be a case of cutting off one's nose to spite one's face.

For us, I think Adrian's recommendation is more realistic - request the builder to accept liability for all faults in writing. The lack of financial leverage may cost us priority but at least we are protected in the long run.

Enigma+Family

To be honest you should give your four weeks notice the day after your handover and sacrifice the months rent. It will be much better in the long run. You should also link your rental period up with the expiration of the building contract if possible so if it goes over the builder is paying with late finishing payments.

I have built twice before this one and no way I would except the house until everything is done or else you will regret it later. i had over 25 issues last time I built I excepted the house and it took a year to get everything done. Is this really worth the $1500 you will loose in rent? I doubt it because you will wait home for tradsmen who dont show, they will fix one issue and create another. The list goes on and on.

Is the one months rent really worth the headache. You should budget that in your building costs like your private inspection costs.

Use your maintanece period only for new items that come up after handover do not allow the builder to us it as an extenmsion type device to construction

Personally, it depends on whether or not I could live in my brand spanking new home with the outstanding issues yet to be resolved. I would, think I would not be moving in or making final payment until I was happy that they have complied with everything that needed to be rectified.
We all know that once final payment has been made, the building company for some reason either disappears or can be extremely slow to respond to your desperate attempts to get them back on the ball.

However saying that, and, if I was still renting, is it not in your contract that the must pay rent of an agreed figure in circumstances like this?

We may be in a similar predicament down the track as we need to sell our current house before moving in to the house we will start on shortly. We just need to time things nicely also.

We signed a 6 month lease with month by month after that and we're prepared to say goodbye to a month's rent for the greater good. But even if we give 4 weeks notice the day after handover, we're still taking a risk that 4 weeks is long enough for everything to be fixed. I like to think they'll fix it quicker to get the cash but who knows.

For us we gave ourselves 2 full months from when completeion is due to when our lease runs out. This was to cover a few things, one if the builderand or weather caused time delay and enough time to get window coverings and carpet etc done.

The way things are going M may need that whole 2 months to get to handover. And how much do we get if they run over? A huge $15 per day. This doesn't even quite cover the storage until we currently have We went into this with eyes as wide open as we could but it would be really nice to see laws that make the builder pay the owner the weekly amount the house being built would get if rented. Houses may actually get finished on time

We are approx 7 weeks from handover date and we haven't even been bricked

On an extended point how can you demand eveything be finished before handover when a contract states:

Practical Completion means the stage when works:
have been completed in accorance with this contract and all relevant statutory requirements apart from minor defects or minor omissions; and are reasonably suitable for habitation.

If you can afford to continue to rent, then I would *strongly* advise you wait till everything is completed before signing. Seriously. As someone who is still waiting, 11 months after handover, for things to get completed, I wish we had waited. There is simply no impetus for the builders to get the work completed...they have your money, the site supervisor has moved on to other projects & the "completed" homes sort of get lost in the system.

One other thing to consider is when your maintenance check is?

For us it is at 12 months...so i will be making very sure that everything is resolved before handover....there is no way i will wait for 12 months for things to be rectified.

In saying that though, i've been told by our C/M that the 12 month maintenance check is a 100% new inspection. It has nothing to do with the pre-handover inspection and any issues raised.... I still think we'll get Kevin in for that inspection too though.

Obviously though, any urgent issues like plumbing, leaks etc. will be rectified a.s.a.p.

Regardless, i'll be waiting for it to be 99.9%- 100% before handover....

The logical thing to do is:
1) Make sure that your liquidated damages covers the cost of rent.
2) Give notice of leaving the rental property once hand-over is executed.
3) Should there be any outstanding issues, deduct the cost of getting those issues fixed (not the builder's cost, but your cost to get someone else to do it) from the final payment.
4) Have an agreed period in which the builder will fix the problems after handover. Also get as part of the agreement that if the builder does not complete in the agred time that you can get someone else to come in and do the fixes.

The builder of course would want all the money at handover, but if the only options given to the builder is fix it first or paymrnt deduction, then they will choose the payment deduction.

You have to treat it like a business.

Thanks Casa - very good advice.

Thanks Phoenix - We're going to hold out as long as possible - even thought we're dying to get in there!! Fingers crossed that all the planets align.

I have copied this comment over to this thread as i thought it is quite relevant.....

I think it also comes down to how "on top of your builder" you are?
Although happy with our current progress, i e-mailed our builder this morning with 4 issues that need resolution before any more of the plaster goes up in a few rooms....

We watch them like hawks.....and they know it too....so NO, i WILL be waiting until it's all done...and properly.
Anyway, what's a few more weeks....we've waited sooooo long already!!!!!

I also email my builder whenever I notice an issue, a lot of things they say they'll fix in the week leading up to handover - like they damaged my fence, and they need to put locks on 3 windows that they forgot about. I'm just keeping a list so I don't forget what I've told them to do.

And I'm with you, what's a few more weeks - I think they'll finish a lot faster if they're still waiting for my final payment. However, I understand that some people have the difficulty that they'll be homeless if they don't accept the house "as is". In my case, the "what's a few more weeks" will probably mean I won't be able to take all the annual leave I've been saving up at work for the move, as there won't be anyone available at work to cover my absence

I plan to not accept handover till everythings completed, but I have the luxury of not renting (thanks Mum & Dad) so can move in whenever.

I don't trust my builders to honor any promises to come back and fix things. They haven't been the easiest to deal with.

What sort of things are considered minor enough to accept handover?

I actually can't really work out what they are doing with my house, its in a subdivision of 24 and mine is by far the most advanced. Its at 2nd fix and none of the others have even reached lockup stage. I don't want to move into a construction zone. I'm hoping issues with insurance delay it so everything has to be completed (its strata titled).

Never going to happen! Try and get your builder to part with more than $250 per week anywhere in Australia. The bigger builders mostly dont even offer this much!



A great idea provided the builder agrees to finish the house in those 4 weeks. If they couldn't finish it in 7-9 months what makes you think they will finish it in 4 weeks??



Never, ever, in 1 million years going to happen. Once the builder has finished the house to a suitable standard, some issues are allowable (cracks in plaster etc) and they have 3 - 12 months to complete a warranty inspection. If you want to hold back payment they have the right to sue you for breach of contract.



Again all these ideas are great in theory but it would never happen. No builder would allow someone else to come in and fix their work and they pay for it. Why would a builder pay extra $$$ to someone they dont know when they can pay their tradesmen less. Also they have to warrant the work for 7 years so again if they dont know the tradesman how could they warrant the construction of the house.



Casa the ideas you have presented are great but the law as it stands favours the builder as opposed to the buyer.

No builder would sign themselves up to conditions like these and if they did I would imagine they wouldn't be around for a real long time.

It would be nice to be able to have some accountability on them though

I think I would have to agree with you Matt. While all of Casa's suggestion would be good, I don't think they are realistic. I would love to find a builder who would agree.

I guess it will just be a matter of wait and see for us. I think the SS & CM now realise that they can't get anything by us, they have seen enough of us jumping up & down.

Would love to discover the definition of minor. Have had a look at BSA website but have had no luck.

Anne

I don't know what is in everyone else's contracts regarding final payment but mine says (in a number of clauses) that when the builder tells me the house is finished:

- we are to meet on site to inspect the house
- at the end of the inspection I have to give the builder a written list of all known defects and incomplete work.
- the builder is to fix the defects and incomplete work
- only after the builder has fixed the defects and incomplete works are they able to present me with a final invoice and it then becomes due within 14 days (I changed my payment terms from the standard 7 days)
- when I pay them they will give me the keys.

My contract does not say anything about practical completion. The only thing it does say that indicates there may be a problem is that in giving the builder the list of defects, and having him sign it, it is not an admission on their part that there are actually defects - so I guess they might argue that the things I want fixed are not defects.