What Is Practical Completion?
Practical completion is the point during a building project when the work is substantially finished and the building can be reasonably used for its intended purpose. It does not mean every last detail is perfect — minor defects or omissions may still exist — but the building is considered complete enough for handover to the owner.
Why It Matters
Practical completion triggers several important legal and financial milestones:
- Final payment — the builder becomes entitled to the final progress payment (less any retention amount for defects)
- Defects liability period — the clock starts on the period during which the builder must return to fix any defects at no extra cost
- Insurance coverage — home warranty insurance periods are typically calculated from the date of practical completion
- Handover — the homeowner takes possession of the property and assumes responsibility for insurance, security, and maintenance
A practical completion inspection should be conducted jointly by the builder and the homeowner (or their representative). Any incomplete or defective work is recorded on a defects list, and the builder is given a reasonable timeframe to rectify these items.
State Variations
| State/Territory | Defined In | Key Requirement |
|---|---|---|
| QLD | QBCC Act / HIA contracts | Builder must give written notice of practical completion |
| NSW | Home Building Act 1989 | Defined in standard building contracts |
| VIC | Domestic Building Contracts Act 1995 | Builder must issue a notice of completion |
| WA | Home Building Contracts Act 1991 | Written notice required |
| SA | Building Work Contractors Act 1995 | Defined in building contracts |
How It Relates to Licence Verification
Only a licensed builder should be bringing a project to practical completion. If your builder’s licence lapses or is suspended during the project, they cannot legally continue or complete the work. Use TradieVerify to verify your builder’s licence status remains current throughout the project, particularly before making the final payment at practical completion.