Practical Completion V’s Defects

There can often be some confusion between what is meant by the terms “Practical Completion” and a “Defect” or “defects liability period”. The below should help to explain the difference.

What does Practical Completion of works mean?

It means that the contracted works are complete except for some minor omissions and defects which do not prevent the works from being reasonable fit for their intended use.

When this stage is achieved, the Builder is entitled to the unpaid balance of the agreed contract price, together with any other outstanding monies, such as variables or any additional extras that were added throughout the build.

Works that needs to be completed by the Builder in order to achieve Practical Completion include:

All items that have been listed in and agreed to as part of the building proposal (quote) and scope of work documentation must be completed.

They do not include items such as:

· Work that was to be done or is still to be done by the Owner;

· The defects list;

· Damages, knocks, scratches, etc. that have taken place when the owner has moved into the property or newly renovated area;

· General wear and tear from living in the newly renovated property (i.e. stains, scratches to floors, marks to paint etc.);

· Exposure of the works to the environment – i.e. damages from storms, hail, lightening, dirt and debris from strong winds, fire etc.

What is the defects liability period?

This commences upon Practical Completion of the works and will continue for an agreed period. For us, it is a period of thirteen (13) weeks.

What is a defect?

A defect is a fault or issue arising out of workmanship or material provided by the Builder and or contractors.

The builder/contractor is to make good any defects or faults which are attributed to the Builder’s/Contractors work, and fix them within the agreed 13 week defects liability period.

Examples of common defects that are to be rectified during the defects liability period are:

·         Paint drops on floors;

·         Missed grouting, silicon in tiles;

·         Door locks not working properly;

·         Leaks from taps, roofs or gutters; etc.