Work nears completion – there are a few further steps to be taken before signing off the project. Making sure everything is finished and final inspections are done.
The end of the project may not be the occasion you imagined. The builder will be making arrangements to start the next job and may start transferring staff and equipment before your job is completely finished, leaving the remaining subcontractors to finish off unsupervised.
You can protect against this by having a clause in the contract that the main contractor (or their representative) maintains a permanent presence on the site until actual completion or handover. Your contract needs to define what constitutes the end of the project, or practical completion.
If your architect or designer is managing the project, the same problem can arise – they may put their efforts into their latest project and have less time to oversee and tidy up the loose ends at yours. Conversely they may find themselves left to tidy up the loose ends neglected by the main contractor.
One way to ensure completion, and to keep the project rolling, is to have a contract that requires you to pay only when milestones are reached.
Nicola had a substantial extension built on to her house. In her contract with the main contractor, she had an agreed payment plan that had certain ‘milestones’ attached. She paid 20% deposit, the next 20% when the shell was completed and weather tight, and further percentages for each stage. There were major delays caused by the subcontractors but the builder was very motivated to chase them up as his payment depended on the milestones being completed.
Actual, or practical completion of the project, relates to when everything in the contract is completed. Therefore signing-off is a contractual matter and is nothing to do with the BCA's final inspections. The 10-year period to make legal claims against those involved in designing and building the house begins once the work is signed off as being completed (not when a code compliance certificate is issued).
Building work is finished, but there are three final things to consider:
- A final inspection must be carried out by the building inspector to ensure everything complies with your building consent. If everything is satisfactory, a code compliance certificate will then be issued.
- Most contracts allow for a retention or withholding sum to be held back for a certain period, known as the maintenance period, after building is completed. This will be a percentage of the total price and 10 percent is common. You may have the opportunity to live in the house during this period, although it may not be possible if a CCC has not been issued, and if any problems or defects come to light the builder is obliged to fix them before the final payment is made. It is important this period includes part of winter when the weather is usually wet to test for weathertightness. Note that under some guarantees you cannot hold back any money or your guarantee is invalidated.
- When leaving the site the contractor should:
- Ensure it's clean and tidy and ready for use.
- Give you:
- A copy of any current insurance policy they hold for the building work completed under the contract. This doesn’t include policies that expire when the work is completed.
- A copy of any guarantees or warranties for materials or services used in the building work, including information about how to make a claim if the guarantee and whether the warranty is transferable. Also, you must be told if it must be signed and returned to the issuer.
- Information about what is needed to maintain the building work; particularly if maintenance is required to meet the durability requirements of the building code or maintenance that could affect any guarantee or warranty.
You, as the owner, should advise the BCA when work is completed and apply for a code compliance certificate (CCC), (although in reality this will often be delegated to your builder or project manager). The BCA will then make a final inspection and issue you with a CCC if satisfied on reasonable grounds that the completed work complies with your building consent.
If the inspector is not satisfied, you will be issued with a notice to fix, which lists what items must be corrected before a CCC can be granted. You are legally required to make sure the items on the notice are rectified and advise the council when everything is done. You may have to go back to your contract with your builder and see who is responsible for the work that needs fixing. The council will inspect and consider whether or not a CCC can be issued.
There is considerable emphasis on getting a CCC under the 2004 Building Act. There are several significant advantages in doing so.
- It could be a major obstacle should you want to sell your house. Sale and purchase contracts are often conditional on a CCC having been granted.
- You won’t have the peace of mind of a ‘final sign off’ on the compliance of the finished building.
You must apply for a CCC at the end of the job. If you do not do this within 2 years of the grant of the consent, your BCA should contact you to follow up on the work.
It is worth noting that there are a large number of houses built since CCCs were introduced in 1991 that don’t have one.
If you have a cable car you will be issued with a compliance schedule at the time your CCC is issued. This requires you to maintain the cable car and provide the council with an annual building warrant of fitness.
If you don’t accept that the BCA had reasonable grounds for not issuing a CCC, you can apply to the Department of Building and Housing (DBH) for a binding ruling on technical matters of dispute, known as a Determination.
Making your own inspection
It’s a good idea, when the builder is ready to hand over the keys, to walk through the new house, initially by yourself, and then with the builder. You should have been taking an active role in monitoring progress and already be familiar with the building work, including defects. You may have already discussed these with your builder.
In the final walk through carefully note, and possibly photograph, surfaces of counters, floors, walls, fixtures and fittings. Record any damage at the same time so that there can be no dispute later about whether the chipped bench-top was caused by the builder or the movers.
Use the walk through as an opportunity to learn about the features you need to operate, such as the woodburner or ventilation systems. The instruction booklets and warranties should be made available to you for each of the appliances.