Practical Completion

# Chapter 21: Practical Completion  Practical completion is the moment when your project shifts from active construction to occupied building, and understanding this transition will become central to your work as a graduate architect in Victoria. ### **What "Practically Complete" Actually Means** Think of practical completion as the contractual handshake that says "this building is ready for its intended purpose." It's not about perfection, no building project ever achieves that, but about reaching a standard where the owner can reasonably use and occupy the space. Under AS 4000:2025 (released June 2025 after 28 years), the test remains consistent: the works must be complete except for minor defects, all required tests must pass, and you need to provide the essential documentation. The distinction between "minor" and "major" defects often sparks debate on site. Minor defects are those that don't prevent the building's use, think paint touch-ups, minor scratches on fixtures, or slightly uneven grout lines. Major defects, however, fundamentally affect usability. Missing kitchen appliances, incomplete bathrooms, or absent safety features will stop practical completion in its tracks. As you develop your eye for these distinctions, you'll find that context matters enormously. A small paint blemish in a luxury residence might be treated differently than in a commercial warehouse. The evolution through case law has sharpened these definitions considerably. The term "practical" doesn't mean "nearly complete" or "substantially complete", it means the building fulfils its intended purpose subject only to defects that don't prevent reasonable use. Recent cases like H & M Constructions v Golden Rain Development (2023) have reinforced that you cannot issue "conditional" practical completion certificates unless the contract specifically allows for them. When asked to certify practical completion, you have two options: issue the certificate or provide clear reasons why the works aren't ready. ### **The Inspection and Certification Process** Your role in the inspection process requires both systematic evaluation and professional judgment. While perfection isn't the standard, substantial compliance with the building permit, approved plans, and relevant standards is non-negotiable. The Building and Plumbing Commission (which replaced the VBA in July 2025\) requires specific mandatory inspection stages throughout construction, culminating in this final assessment. Pre-completion inspections work best when approached collaboratively rather than adversarially. You're not there to "catch out" the builder but to ensure the building meets its requirements. Digital tools have transformed this process, platforms like Procore and PlanRadar allow you to photograph defects, pin them to drawings, and track their resolution in real-time. This creates transparency and helps maintain professional relationships while ensuring nothing gets missed. The new 7-star NatHERS requirements (effective May 2024\) have added another layer to your inspection checklist. You'll need to verify that the as-built construction matches the energy efficiency commitments made at design stage. This includes checking insulation installation, glazing specifications, and fixed appliance ratings, elements that significantly impact whether practical completion can be achieved. ### **Managing Early Occupation and Partial Completion** Commercial realities often push owners to occupy buildings before they're completely finished. You'll encounter situations where retail tenants need to start fitouts, or residential buyers want to move furniture in before landscaping is complete. These scenarios require careful documentation to protect all parties involved. When dealing with partial completion (properly called "separable portions" in contracts), each portion gets its own practical completion date, defects liability period, and often different liquidated damages rates. The key is ensuring these portions are clearly defined in the contract from the start, you cannot create them on the fly. Each completed portion triggers its own risk transfer, with the owner taking on insurance responsibilities while the contractor remains liable for defects during the applicable warranty period. Early occupation without formal practical completion creates particular risks. It can inadvertently trigger deemed practical completion, release the contractor from liquidated damages, and compromise insurance coverage. Always document these arrangements formally, specifying who's responsible for what, which areas are included, and how outstanding works will be completed around the occupation. ### **The Defects Liability Period Framework** Once you've certified practical completion, the defects liability period begins, typically 12 months for commercial projects under AS 4000\. This period benefits both parties: contractors retain access to fix issues that emerge, while owners receive extended assurance that problems will be addressed. Understanding this framework helps you guide clients through post-completion issues constructively. The period isn't a second chance for the contractor to complete unfinished work, it's specifically for rectifying defects that emerge after handover. The distinction between defects (the contractor's responsibility) and maintenance (the owner's responsibility) requires careful judgment. Weather events that reveal latent issues add another layer of complexity, particularly as climate patterns become more extreme. Recent reforms to the Security of Payment Act mean retention money can now be claimed through adjudication, strengthening subcontractor protections. For you as a contract administrator, this means being even more precise about defects classification and completion assessments, as these determinations directly affect payment flows through the construction chain. ### **Practical Insights for Graduate Architects** As a graduate, you'll likely start by assisting senior architects with defects lists and photographic documentation. Use these opportunities to develop your eye for construction quality. Learn to spot the difference between acceptable building tolerances and genuine defects. Understand that a 5mm variation might be acceptable in concrete work but problematic in joinery. The pressure for early completion can be intense, especially on projects running behind schedule. You'll see how delays compound, with liquidated damages mounting daily and clients growing increasingly anxious. Stay focused on the technical requirements rather than the commercial pressures. Your professional duty is to assess practical completion objectively, not to solve scheduling problems by lowering standards. Remember that in ABIC contracts, architects act as independent certifiers, not client advocates. This neutral role can feel uncomfortable initially, especially when clients expect you to "push" for practical completion. Your credibility and professional registration depend on maintaining this independence, even when it means difficult conversations with clients who are paying your fees. **Key Terms:** - **Practical Completion**: The contractual milestone when works are complete except for minor defects, triggering handover, retention release, and defects liability commencement - **Separable Portions**: Contractually defined sections of work that can achieve practical completion independently, each with distinct dates and defects periods - **Minor Defects**: Imperfections that don't prevent reasonable use of the building (paint blemishes, minor scratches) versus major defects that affect functionality - **Defects Liability Period**: The 12-month period post-completion when contractors must rectify emerging defects while retaining site access - **Deemed Practical Completion**: Automatic triggering of practical completion through owner occupation or use, even without formal certification - **Building and Plumbing Commission**: Victoria's consolidated building regulator (from July 2025\) overseeing compliance and issuing enforcement orders - **Liquidated Damages**: Pre-agreed daily amounts payable for delays beyond the completion date, ceasing at practical completion