Questions re: Practical Completion

akky · Jul 11, 2024 10:04 am

Hi
Just wanted to get some guidance and advise.
We have Building Contract (NSW Home Building by Fair Trading) for KDR.
On the schedule the final two progress payments are Practical Completion followed by Final.

Builder is seeking Practical Completion payment as they have issued me an invoice.
Surprisingly no notice of PC was given, and no inspection offered.

The contract includes landscaping.

My questions is, what is definition of Practical Completion.
My understanding was that PC was basically when all items in contract were completed including landscaping to make the house habitable with some defects (that you would obviously pick up during PCI)

The house has not been painted inside or outside
The house has no electricity/ downlights/ switches
Plumbing fit off is 75% done
No Balstraudes
No stair treads
Some windows are missing glasses
No fly screen
No garage door
No door hardware
Appliances not installed
List goes on...

Should I be firm and ask for all the items in contract to be finished off prior to releasing any payment.
Would it be reasonable to also ensure landscaping is completed prior to PC payment.

Thank you in advance

building-expert · Jul 11, 2024 3:19 pm

Your understanding of PC is correct, be firm

Althom · Jul 11, 2024 3:23 pm

Practical Completion is generally held to mean "which is when the work is completed except for any omissions or defects that do not prevent the work from being reasonably capable of being used for its intended purpose."
If you have no electricity/switches, missing windows, incomplete plumbing, no door hardware etc then it is not fit to be used for its intended purpose i.e. as a domestic residence.
So there is no way such a building can be Practically Complete.
Are you sure they are claiming Practical Completion or is it Lock Up?
Lack of landscaping would not stop you from living in the house unless the block was of such a nature that you were unable to get reasonable access without it being don.

Pedro4137 · Jul 11, 2024 6:08 pm

Read your contract

Very important to understand what have to do when builder issues final payment invoice. That is the critical moment and prepare for it

PCI is important, often a distraction

Ashington Homes · Jul 12, 2024 5:55 am

akky

Hi
Just wanted to get some guidance and advise.
We have Building Contract (NSW Home Building by Fair Trading) for KDR.
On the schedule the final two progress payments are Practical Completion followed by Final.

Builder is seeking Practical Completion payment as they have issued me an invoice.
Surprisingly no notice of PC was given, and no inspection offered.

The contract includes landscaping.

My questions is, what is definition of Practical Completion.
My understanding was that PC was basically when all items in contract were completed including landscaping to make the house habitable with some defects (that you would obviously pick up during PCI)

The house has not been painted inside or outside
The house has no electricity/ downlights/ switches
Plumbing fit off is 75% done
No Balstraudes
No stair treads
Some windows are missing glasses
No fly screen
No garage door
No door hardware
Appliances not installed
List goes on...

Should I be firm and ask for all the items in contract to be finished off prior to releasing any payment.
Would it be reasonable to also ensure landscaping is completed prior to PC payment.

Thank you in advance

I have cut and pasted Clause 8 which is the completion clause below. It is very easy to ready and understand which is why the NSW Fair Trading contract is so good.

Clause 8
Completion of work
The work will be complete when the contractor has finished the work in accordance with the contract documents and any variations, there are no omissions or defects that prevent the work from being reasonably capable of being used for its intended purpose, any damage of the kind referred to in Clause 19 has been repaired, and all rubbish and surplus material has been removed from the site.
When the contractor believes the work is complete, the contractor must notify the owner in writing certifying that the work has been completed in accordance with this contract. Within 10 business days of receipt of written notice from the contractor, the owner must advise the contractor in writing of any items of work the owner considers to be incomplete or defective. If the owner does not so notify the contractor, the work will be taken to be complete.
The contractor must complete any outstanding work promptly and again notify the owner in writing. Unless the owner notifies the contractor in writing that any item is still incomplete or defective within a further 10 business days from receipt of notification by the contractor, the work will be taken to be complete.
Should there be any dispute between the parties as to whether the work has been completed, it must be dealt with in accordance with the dispute resolution procedure (Clause 27).