Understanding the legal framework surrounding inspections and defects lists is critical for both builders and homeowners navigating residential construction projects. These requirements ensure that construction is compliant with regulatory standards and that homeowners receive a completed, habitable, and safe dwelling. Both pre-completion and post-completion inspections are essential, and certain statutory steps must be followed before practical completion can be validly certified.

Pre-Completion Stages

Critical Stage Inspections

Before a property reaches the stage of practical completion, a series of “critical stage” inspections must occur. These inspections are designed to assess various structural and safety elements at specific milestones in the construction process. The inspections include, but are not limited to:

  • Footings and foundations: Ensuring the building is structurally sound from the base up.
  • Framework: Confirming that the frame aligns with approved plans and engineering specifications.
  • Waterproofing: Vital for wet areas such as bathrooms and balconies.
  • Fire separations: Especially important in dual occupancy and townhouse developments.
  • Smoke alarms: These must comply with safety regulations and be installed before final inspection.
  • Final inspection before occupation certificate: This is crucial and must be conducted by the appointed Principal Certifying Authority (PCA).

These inspections provide checkpoints to ensure regulatory compliance and catch potential defects before the build advances too far.

Final Inspection

The final inspection, performed by the PCA, is required before an occupancy certificate can be issued. This inspection confirms that the construction meets applicable standards and approved plans. Importantly, builders must supply all documentary evidence of compliance for earlier inspection stages before a final inspection can be completed.

Practical Completion Stage

Notice and Rights to Inspection

Once the builder believes the work has reached practical completion, they must issue a formal notice of practical completion to the homeowner. This triggers several rights for the owner, including the ability to:

  • Accept the notice and pay the final progress claim.
  • Notify the builder of any work still required to achieve practical completion.
  • Dispute the notice through contractual dispute resolution procedures.

It is important to understand that practical completion does not mean the building is flawless. It simply means the work is substantially complete and fit for its intended purpose, though minor omissions or defects may still exist.

Defects Liability Period

Following practical completion, a defects liability period, typically around 13 weeks or as specified in the contract, commences. During this time, the homeowner is entitled to submit a single defects list of any issues that emerge post-completion. These defects must be addressed by the builder within a reasonable time.

This process ensures that latent issues which could not have been reasonably discovered before completion can still be rectified.

Post-Completion Stage

The homeowner’s obligation post-completion is to conduct a reasonable inspection of the premises. This does not require specialised tools or invasive investigation. Instead, defects should be reported based on what a reasonable person could observe upon visual inspection. Examples include misaligned cabinetry, unsealed gaps, or improperly installed fixtures.

Key Considerations 

  1. Timing is Critical: Some defects, especially those affecting habitability, must be rectified prior to completion, while others can be addressed during the defects liability period.
  2. Date of Completion: Disputes can arise regarding when “completion” officially occurs. This is particularly important for triggering timeframes related to payment, certification, and defect notifications.
  3. Contract Terms Matter: Homeowners should carefully review their building contracts. These documents often specify processes for defect identification, rectification timelines, and formal notice requirements.
  4. Non-Compliance Risks: A final occupancy certificate cannot be issued if the mandatory critical stage inspections are not completed. This can have serious legal and financial implications for both parties, including delays in occupancy or breaches of contract.

 

Thorough inspections and careful documentation of defects play a key role in the legal and practical success of residential construction. Homeowners and builders alike must ensure they understand and comply with all pre-completion and post-completion obligations to avoid unnecessary disputes, delays, or financial loss.

Feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our social media accounts.

DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article and if you require specific legal advice, please contact us.