What Is Handover or Practical Completion?
A dwelling reaches Handover or Practical Completion (PC) once all the contracted building works are complete and the property is ready for the owners to move in.
What Is A Pre-Handover Inspection?
A pre handover inspection or Practical Completion Inspection (PCI) is conducted by an owner or buyer of a newly constructed dwelling once the home reaches Practical Completion & is ready to be handed over to the owner, but prior to the owner making their final payment and taking possession of the home. This inspection is usually conducted by the owner/buyer themselves or by a third-party building inspector or rental manager.
The purpose of a pre handover inspection is to identify defects that the builder needs to address and rectify as part of the build contract. In most cases, the defects are minor in nature, but occasionally, more serious defects can be noted during the inspection.
There are many names for a Pre-Handover Inspection, but they all mean the same thing. Some common names include, Practical Completion Inspection (PCI), Handover Stage Inspection, New Home Inspection, Off The Plan Home Inspection, New Build Inspection, New Home Walkthrough, New Home Defect Inspection, Final Defect Inspection, etc. Despite the variety of names, they all mean the same thing that we will refer to simply as a Handover Inspection.
What Does Practical Completion Mean?
Practical completion is when the contracted works of a construction project have been completed except for minor defects. In order to have reached Practical Completion, a home needs to be fully habitable. This definition is relatively simple for newly constructed homes, but during major renovation works to an existing home, practical completion can be a bit more of a grey area.
What Is A Contract Inclusions Check?
A contract inclusions check is usually an additional service that a third-party inspection company will offer to conduct during a handover inspection. The cost varies but is usually to the tune of approx. $195-250 on top of the handover inspection fee.
For that fee, the inspector will look at the inclusions within and written variations to your build contract and check whether they have been included. Despite the cost, a contract inclusions check will usually not include confirmation of colour choices by the inspector.
A contract inclusions check is usually more accurate and effective when conducted by the homeowner themselves. Having made the selections and requested the variations themselves, a homeowner is better equipped to check that their expectations have been met by the builder.
What Is The Purpose Of A Pre-Handover Inspection?
The purpose of a pre handover inspection is to identify defects in the workmanship of the contractors’ work, variations to the contracted works or omissions from the contracted works. It is the final inspection before the homeowner pays their final instalment or settles on the property if they did not commission the build and allows the owner or buyer to make sure the home has been completed to the appropriate standard. The resultant list of defects is then provided to the builder for rectification prior to settlement or at a time mutually agreed by all parties.
What To Look For In A Pre-Handover Inspection?
The primary role of a handover inspection is to ensure that the home has been completed to the agreed upon standard. In light of that, it is important that major defects or omissions are identified prior to the final instalment being paid.
Although that is the primary role of the handover inspection, it is also an opportunity to identify smaller quality issues that should reasonably be addressed as part of the build process.
Common Defects Found During A Handover Inspection
The most common defects noted during a pre-handover inspection are minor paint defects. Most surfaces in the home interior and exterior have a painted finish, and minor paint defects are both very common and easy to spot. Defects such as inadequate coverage, dings & scratches, contaminants, drips, sags and poor cutting in are common findings.
Other less common defects include drummy tiles, scratches on cabinets, loose fittings, chips in rendered surfaces, light switches and GPO’s out of plumb, doors sticking or contacting floor coverings, paint overruns, loose door furniture, uneven cabinetry gaps, poorly finished or omissions of silicone seal and the list goes on.
When Do Minor Defects Need To Be Fixed By The Builder?
A list of minor defects does not mean that the property is unsuitable for handover. It is common practice for a builder to rectify minor defects prior to handover to ensure a smooth process for handover and to prevent any of the final payment from being withheld by the homeowner. However, it is not mandatory for minor defects to be rectified prior to handover as long as both the builder and the homeowner come to an agreement for when they will be rectified.
If, for timing reasons, you need to take handover of your property before the builder is able to rectify all defects, it is recommended that a defects document, like the Inspection Buddy report, be produced to show all agreed on defects and be signed by both parties with an agreement for timing of rectification.
In the above instance, the defects need to be rectified as soon as practical by the builder and no longer than 12 months from handover.
Major Defects In A New Home To Look Out For
Although major defects are less common, they do still occur. The definition of a major defect under the Australian Standard AS-43491.2007 is – “A defect of sufficient magnitude where rectification has to be carried out in order to avoid unsafe conditions, loss of utility or further deterioration of the property”
Essentially a major defect can be classified as any defect that interrupts the use of the property or has the risk of causing further deterioration of the property or represents a safety hazard.
– Some examples would include
– Water ingress from the roof, windows, doors or anywhere else
– Failure of waterproofing in the bathroom or other areas
– Structural damage to the roof, footings or other supporting structures
– Poor site drainage
– Breaches of the National Construction Code
When Do Major Defects Need To Be Fixed By The Builder?
On the rare occasion that major defects are noted during a pre handover inspection, then the property is deemed to have not yet reached Practical Completion. This means that all major defects need to be rectified prior to payment of the final instalment and handover.
Can I Do My Own Pre-Handover Inspection?
At Inspection Buddy we believe that it is within the scope of all people to be able to conduct their own pre-handover inspection with some guidance, some simple tools and basic reporting software. You may not have the same depth of knowledge as a licensed building inspector; however, you do have the capacity to learn enough to recognise issues and draw attention to potential major issues.
As the homeowner you also have the advantage of personal investment, that connection to the outcome will serve you well.
And the good news is our solution is so cost effective, that if you do notice any potential major defects during your inspection, you can feel confident to engage a licensed building inspector to help you understand the scope of those issues.
Should I Get On The Roof Or Inside The Roof Cavity For A Handover Inspection?
A common question we are asked is if a homeowner should get onto or into the roof during their handover inspection. It is important to note that until handover the home remains a building site under the duty of care of the builder. As such, it is at the discretion of the site supervisor whether they will allow you to climb onto the roof or into the roof cavity.
Please note that the likelihood of causing damage to property or person is significantly higher if you decide to climb onto or into the roof, if that is a risk that you and your builder are comfortable to take.
How Much Does A Handover Inspection Cost?
The average cost of a pre-handover inspection for a normal sized house in Australia is between $500-$650. A small unit is usually marginally cheaper, and a large house can run well over $1000.
The average cost varies by region, with Sydney & Melbourne being the most expensive on average.
What’s The Alternative?
The great news is that Inspection Buddy is a flat fee of $50 for any type of dwelling of any size. In fact, you could do all 6 building stage inspections for less than the cost of a single handover inspection by a third-party provider.
We will provide you with a full suite of instructional “How To” videos as well as customisable reporting software that you can tailor to the layout of your home, make comments, add photos and will generate you a professional PDF report within minutes of submission, no more waiting around to receive your report, or chasing up third parties.
To get started click HERE and choose the options that are right for you.
