Practical completion handover: the on-site process
How to run the PCI walk, compile the defects list, package keys and manuals, get the OC, and release retention at practical completion handover.
Ask Chalkline about this →TL;DR
Practical completion handover is the on-site process where the builder and client walk the finished job together, document any defects, and exchange keys and compliance documents. Under an HIA new dwellings contract (NSW), the builder must give at least 5 days’ written notice and meet the client on-site; the client must pay the final progress claim or issue a written defects notice within that window (verified 2026-05-10, HIA, Practical completion of HIA contracts NSW). The Occupation Certificate (OC) must precede lawful occupation in NSW; in VIC it is the Occupancy Permit. The defects list is signed by both parties at the inspection and drives the rectification program before the first retention tranche is released. The biggest hold point is a defects notice that lists items the builder disputes: that forces dispute resolution and can delay final payment by weeks.
When you do this
Practical completion handover happens once:
- All structural, lining, tiling, painting, joinery, fixtures, fittings, and external works are complete (except items the parties agree in writing are minor omissions).
- The Occupation Certificate (NSW/QLD) or Occupancy Permit (VIC) has been issued, or is confirmed ready to issue immediately after the final inspection.
- All compliance certificates are assembled (smoke alarms, electrical, plumbing, waterproofing, BAL where applicable).
- The keys, remote controls, warranty cards, and appliance manuals package is prepared.
Do not book the PCI until all of the above is genuinely in hand. A premature notice with outstanding work gives the client grounds to refuse PC and issue a defects notice, which delays final payment and complicates the retention release.
Who’s involved
| Role | Responsibility at handover |
|---|---|
| Builder (or site manager) | Issues the notice of practical completion, attends the PCI walk, receives the defects list, coordinates rectification, hands over keys and documents |
| Client (owner) | Attends the PCI walk, inspects finished work, pays the final progress claim or issues a written defects notice within the notice period |
| Building consultant (optional) | Independent inspector engaged by the client to attend the PCI and compile the defects list; not a party to the contract but may attend at the client’s cost |
| Principal certifier / building surveyor | Issues the Occupation Certificate (NSW) or Occupancy Permit (VIC) after the final mandatory inspection; must have been notified separately before the PCI |
| Plumber / electrician | Their compliance certificates (CoC) feed into the OC application; they are not present at the PCI itself |
Steps
1. Prepare the OC application
Before issuing the notice of practical completion, confirm with the principal certifier that the OC application is lodged and the final inspection can be booked. In NSW, the OC is issued by the principal certifier under the Environmental Planning and Assessment Act 1979 (NSW), ss 6.9 to 6.10, after all mandatory critical-stage inspections have been passed and all consent conditions are satisfied (verified 2026-05-10, NSW Planning Portal, Stage 6). In VIC, the building surveyor issues the Occupancy Permit under the Building Act 1993 (VIC) once the building is safe and fit for occupation (verified 2026-05-10, VBA, End of your building project).
The OC/Occupancy Permit is a prerequisite for lawful occupation. The client cannot move in without it.
2. Assemble the compliance documents package
Before the PCI, prepare a complete handover package. This varies slightly by state but a standard residential package includes:
| Document | Source | Notes |
|---|---|---|
| Occupation Certificate (NSW) or Occupancy Permit (VIC) | Principal certifier / building surveyor | Must be in hand or ready for immediate issue |
| Electrical Certificate of Compliance | Licensed electrician | Required in all states; lodged with the state electrical safety regulator |
| Plumbing Certificate of Compliance | Licensed plumber | Required in all states; lodged with the state plumbing regulator |
| Waterproofing compliance certificate | Licensed waterproofer | Required under NCC in wet areas; state requirements vary |
| Smoke alarm compliance (hardwired) | Licensed electrician | NSW: Smoke Alarm Installation Certificate; QLD: Certificate of Testing and Compliance under Electrical Safety Regulation 2013 (QLD) s227 (verified 2026-05-10, QLD Fire Department); VIC: part of Occupancy Permit evidence |
| BAL compliance evidence | Building certifier / bushfire consultant | Only for sites in a designated bushfire prone area; must demonstrate construction to AS 3959:2018 per NCC 2022 H7D4 (verified 2026-05-10, ABCB NCC 2022 H7D4) |
| BASIX completion receipt (NSW) | NSW Planning Portal | Required where BASIX applies; confirms all BASIX commitments fulfilled |
| Home warranty insurance certificate | Insurer (icare NSW, VMIA VIC, QBCC QLD etc.) | Must remain in force; client should already hold a copy |
| Structural engineer’s certification (where required) | Structural engineer | For engineer-designed elements (post-tensioned slabs, complex steel, unusual footings) |
3. Prepare the keys and manuals package
| Item | Notes |
|---|---|
| All door keys (minimum 2 sets) | All external entry points: front, rear, garage, side gate |
| Remote controls | Garage doors, gates, security system |
| Appliance manuals and warranty cards | Oven, cooktop, dishwasher, rangehood, HVAC, hot water system, ventilation fans |
| Alarm system codes and user guide | Including how to re-program codes post-handover |
| Paint colour schedule | Supplier, product, colour codes for each room and external area |
| Any specialist system documentation | Underfloor heating, solar, battery storage, EV charging point |
4. Issue the notice of practical completion
Issue the notice in writing, at least 5 days before the proposed PC date in NSW (verified 2026-05-10, HIA NSW). In VIC, the standard HIA contract requires notice of completion and the final claim to be provided together, with a 7-day window for the client to attend a final inspection (verified 2026-05-10, HIA, Final payment and handover procedure).
The notice must include:
- The expected practical completion date
- Date and time of the on-site inspection
- The final progress claim
Retain a copy with proof of delivery (email confirmation, signed delivery, or registered post).
5. Conduct the PCI walk
Arrive on-site with the defects list form ready (printed or in an app). Walk the job room by room, systematically. The sequence that works:
- Exterior: site drainage, driveways, paths, landscaping where specified, external walls (cracks, paint finish, gaps at junctions), roof (visible from ground or safe viewing point), gutters, downpipes, fascia, flashings, window reveals and seals, garage doors
- Wet areas: bathroom, ensuite, laundry, kitchen: tiling (lippage, grout lines, silicone at junctions), tapware, sanitaryware, cabinetry reveal, shower screen, splashback
- Internals room by room: walls (paint finish, scribers, cornice lines), ceilings (uniformity, cornice joints), joinery (doors square and closing cleanly, draws operating, cabinetry alignment), flooring (gaps, lippage, scratches), power points, light switches, lights, window frames and operations
- Smoke alarms: check all are installed per NCC 2022 Part 9.5 (mains-powered, interconnected, photoelectric, AS 3786 compliant), verified 2026-05-10, ABCB NCC 2022 Part 9.5
- Mechanical and services: test hot water system temperature, test air conditioning (cool and heat), check all exhaust fans are connected and functioning, test door bells and intercoms
Record every defect observed: location, description, photo where applicable. Both parties sign the defects list at the end of the inspection.
6. Handle the client’s response
After the PCI walk, the client must (within the notice period under the contract):
Option A: Pay the final progress claim. This establishes PC. The builder proceeds to rectify the defects list within a reasonable timeframe. Keys and documents are handed over.
Option B: Issue a written defects notice. The notice must identify specific items the client claims need completion or rectification before PC is reached. The builder then either:
- Completes the identified items and reissues a notice of practical completion (resetting the 5-day window), or
- Rejects any item not considered a legitimate defect and refers to the contract’s dispute resolution procedure
If the client does neither: under the HIA NSW contract, PC is deemed reached on the date stated in the notice, and the final claim becomes payable as a debt (verified 2026-05-10, HIA NSW).
7. Hand over keys and documents
Once PC is established and the final payment is received (or the claim is undisputed), hand over:
- Keys and remotes package (Step 3 above)
- Full compliance documents package (Step 2 above)
- Signed defects list (both parties’ copies)
- Home warranty insurance certificate
Give the client the OC or Occupancy Permit at this point if not already provided. In NSW, the principal certifier issues the OC; the builder does not issue it but should confirm it is in hand before handing over keys.
8. Rectify defects from the list
After handover, work through the agreed defects list promptly. The builder must rectify items within a reasonable timeframe and provide written notice of completion when done. The client must provide reasonable site access.
9. Retention release: first tranche at PC
Under a standard retention clause (5% of each progress payment), the first tranche (half of total retention held) is released at practical completion. The builder’s final progress claim will factor this in. The second tranche is released at the end of the defects liability period. The DLP under HIA standard new homes contracts is typically 13 weeks; under QBCC contracts it can run to 12 months for non-structural defects (verified 2026-05-10, QBCC, Practical Completion Inspection); check the specific contract for the agreed duration. See Retentions clause for the full release mechanics.
Tolerances and acceptance
Defects identified at the PCI are assessed against:
- The contract specification (product, finish, and workmanship standards agreed at contract)
- Relevant AS standards for the work type (AS 3740 for waterproofing, AS 3958 for tiling, AS 2589 for plasterboard finish, etc.)
- The HIA Guide to Materials and Workmanship and the relevant state Guide to Standards and Tolerances
A claim must point to a specific tolerance or finish standard that has been breached. “Looks wrong” or “we don’t like it” is not a valid defect unless it can be referenced against a contract specification or published standard. The defects list should record the specific item, location, and the basis of the claim.
HIA Guide to Materials and Workmanship tolerance values for PCI acceptance at completion pending HIA member access. [HIA-120]
Documents needed
- Signed notice of practical completion (builder’s copy with proof of delivery)
- Defects list template (printed or in app) with spaces for location, description, and photo reference
- Compliance certificates package (see Step 2 table)
- Keys and manuals package (see Step 3 table)
- Contract (to confirm notice period, DLP duration, and retention release triggers)
- Final progress claim document
Common holds
| Issue | Typical cause | Resolution |
|---|---|---|
| OC not ready | Final inspection not yet booked or consent conditions outstanding | Confirm OC application and critical-stage inspections are complete before issuing PC notice |
| Client refuses to attend PCI | Client unavailable or engaging building consultant who is unavailable | Reschedule within the notice period; document all attempts to meet |
| Disputed defects notice | Client lists items builder considers outside the contract scope or within tolerance | Check each item against contract spec and published standard; reject items not supported by a reference; refer unresolved items to dispute resolution |
| Smoke alarm compliance certificate missing | Electrician has not lodged or provided the certificate | Obtain the hardwired smoke alarm Certificate of Testing and Compliance before the PCI; do not proceed to handover without it |
| BAL compliance evidence missing | Certifier has not issued compliance confirmation for bushfire-prone site | Coordinate with principal certifier well before PC; BAL evidence is part of the OC sign-off |
| Final payment not received within contract timeframe | Client delay or finance not in place | Issue a formal payment claim under the relevant Security of Payment Act for the state; do not release keys until payment clears |
| Keys not ready (locksmith delay) | Late delivery of deadlock cylinders or garage remote programming | Arrange keys and remotes at least 1 week before the PCI date |
Try it
A Chalkline Compliance Checker will let you cross-reference your PCI checklist items against the relevant AS standards and state workmanship guides before the walk. Coming soon.
References
- HIA, Practical completion of HIA contracts NSW (hia.com.au) (verified 2026-05-10)
- HIA, Final payment and handover procedure (VIC) (hia.com.au) (verified 2026-05-10)
- QBCC, Practical completion inspection (qbcc.qld.gov.au) (verified 2026-05-10)
- NSW Planning Portal, Stage 6: Get your Occupation Certificate (planning.nsw.gov.au) (verified 2026-05-10)
- Environmental Planning and Assessment Act 1979 (NSW) ss 6.9 to 6.10, Occupation Certificates (legislation.nsw.gov.au) (verified 2026-05-10)
- VBA, At the end of your building project (vba.vic.gov.au) (verified 2026-05-10)
- QLD Fire Department, Smoke alarms (fire.qld.gov.au) (verified 2026-05-10)
- ABCB NCC 2022 Housing Provisions Part 9.5, Smoke alarms and evacuation lighting (ncc.abcb.gov.au) (verified 2026-05-10)
- ABCB NCC 2022 Volume Two H7D4, Class 1 buildings in bushfire-prone areas (ncc.abcb.gov.au) (verified 2026-05-10)
Related
- PCI (Practical Completion Inspection)
- Defects list
- Practical completion
- Defects liability period
- OC (Occupation Certificate)
- Retentions clause
- Occupation certificates
- Retention
See also
- Retention bond
- Statutory warranty
- HIA fixed price contract
- HIA contracts overview
- Progress claims
- BAL (Bushfire Attack Level)
- Snag list
- Frame inspection checklist
- Private vs council certifiers
- HIA Guide to Materials and Workmanship
Last updated: 2026-05-10. Verified: 2026-05-10. Quarterly review for currency.