What is practical completion in a building contract?

How it works in Ireland

Practical completion is a milestone in a building contract. It means the work is finished apart from small items that do not stop you using the house, and the contract says who decides when that point has been reached. In many contracts that is the architect or other person administering the contract.

It matters because other things hang off it. Retention is often released in part at practical completion and the rest after the defects period. The builder’s obligation to finish on time is judged against it. Your insurance position can change too, since construction-stage cover may end at completion or when you move in.

Practical completion is not the same as final payment, and it does not mean the house is free of defects. A snag list at this point records what still needs fixing.

What to ask

Ask who certifies practical completion and what test they apply. Ask what has to be in place first, such as the certificate of compliance on completion, commissioning records and manuals. Ask your insurer when construction cover ends and your lender what it needs before the last drawdown. Agree the snag list in writing, with dates.

A common mistake

Moving in, or paying in full, before practical completion is formally recorded. Doing so can affect insurance, retention and your leverage to get outstanding items fixed.

Before you accept it, walk the house with the person certifying and a written list. Check that heating, ventilation, electrics and water all work, and that the documents your lender and the building control process need are in hand, so that the milestone reflects the state of the house.