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Practical completion is an important milestone. It determines who is responsible for insuring the works, when you get final payment, when the defects period starts and whether you are liable to pay liquidated (delay) damages.
“Practical completion” means when the building works are complete except for minor omissions and defects that do not prevent the building works from being reasonably capable of being used for their usual purpose. If you are not sure whether any omissions and defects are “minor” or may prevent the works from being used for their usual purpose, you should contact your HIA workplace adviser for guidance.
At least 5 days before you actually reach practical completion you must give your client a notice of practical completion. The notice must:
When you meet your client on site to inspect the works, your client must either:
If your client pays the final progress claim, the date of practical completion is that stated in your notice of practical completion.
If your client gives you a list of things to be done for the works to reach practical completion you can either:
What if your client does not pay the final progress claim or give you a notice?
If this happens:
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No matter the size of the job, a watertight building contract is critical to protect your business, and the current climate presents a great opportunity to go digital with your contracts.