Handover and defects in Queensland

The last week of a build is when the paperwork matters most. The keys change hands, the final claim gets paid, and a month later you notice the shower screen drips. What you check, sign and write down at handover decides how easy that fix is.

What practical completion means in Queensland

Schedule 1B of the QBCC Act sets the meaning for home building contracts. Practical completion is the day the work is completed:

• in line with the contract, including all the plans and specifications and every statutory requirement
• without defects or omissions, other than minor ones that won't unreasonably affect occupation
• and, if you say there are minor defects or omissions, once the builder has given you a defects document for them

So a granny flat with no hot water isn't at practical completion, because you can't reasonably live in it. A scuffed skirting board doesn't stop practical completion. It goes on the list.

The final progress claim usually falls due at practical completion. That makes the walk-through the moment you have the most leverage. Use it calmly and thoroughly, not as an ambush.

Separately, the building certifier signs off the approval. For a house or granny flat (class 1a) or a shed or carport (class 10), that's a Form 21 final inspection certificate. If the builder engaged the certifier, they must give you a copy of each certificate of inspection. Ask for the Form 21 and the plumbing sign-off with your keys.

The defects document

The law describes it. A defects document is signed by the builder and:

1. lists the minor defects and omissions you and the builder agree exist
2. says when the builder will fix them
3. lists the minor defects and omissions you say exist and the builder doesn't agree with

That third list matters most. A disagreement written down at handover is evidence. A disagreement remembered six months later is a story.

How to do the walk-through

• Book it in daylight and give it time. An hour for a granny flat is about right.
• Bring the plans and your selections. Check against them, not your memory.
• Run every tap and shower, flush every toilet, try every light, power point, fan, door, window and lock.
• Hold a torch flat against walls and ceilings. It shows up bad joints and patches.
• Walk the outside: gutters, downpipes, flashings, steps, decks, and ground that falls away from the building.
• Photograph everything, with the room in the shot.
• Don't sign anything that says there are no defects when there are.

Minor defects vs major

At handover the test is whether a defect unreasonably affects you living there. After handover, the line that counts is structural or not, because the time limits and insurance cover change.

Note what counts as structural for home warranty insurance. It includes a defect that lets water into the home, and one that affects the health or safety of the people living there. A leak isn't a minor defect.

The statutory warranties are part of every regulated contract. The builder warrants that materials will be good and suitable, the work will follow the law and the plans, it will be done with reasonable care, skill and diligence, and the home will be suitable to live in. A clause that tries to take those rights away is void. If a breach first shows up in the last 6 months of the warranty period, you get a further 6 months to start proceedings.

How to raise a defect

1. Write to the builder. Email is fine. List every defective or unfinished item, with photos.
2. Give a timeframe to fix them. QBCC's own example is 14 days.
3. Give the builder reasonable access to inspect and fix. QBCC suggests at least 48 hours notice.
4. Keep a copy of everything, with dates.
5. If it isn't fixed, lodge a complaint with QBCC. Do it well inside the deadlines above, because the insurance windows are short.

You don't need to write first if the builder is bankrupt or in liquidation and their licence is cancelled, or the company is deregistered, or the contractor has died.

What QBCC does

QBCC licenses builders and runs the Queensland Home Warranty Scheme. If it decides work is defective or incomplete, it can direct the builder to fix it within a set time. Before that, it may ask you to go through its process to try to sort it out with the builder. It can choose not to direct a fix where that would be unfair, for example if you refused the builder access or poor maintenance made the problem worse.

If the builder won't or can't fix it, home warranty insurance may pay for the work, within the time limits above. QBCC can't help with electrical work, with defects the contractor didn't cause (a natural disaster, for example), or where it can't identify the contractor.

What's normal settling, and what isn't

New buildings move. Timber dries and shrinks, concrete shrinks as it cures, and soil swells and shrinks with the weather. QBCC's Standards and Tolerances Guide is the yardstick its inspectors use. A few examples from it:

• In the first 12 months, a crack in a plasterboard wall, ceiling or cornice joint is a defect if you can see it from a normal viewing position. After that, hairline to slight cracks (categories 0 to 2) aren't defects. Wider ones are.
• In a slab, hairline to slight cracks (categories 0 to 2) aren't defects. Moderate and severe cracks (categories 3 and 4, from about 2mm wide) are.
• Random cracks in paths and driveways up to 1mm wide are within tolerance. Cracks caused by trees, heavy vehicles or over-watering the garden aren't the builder's problem.
• Seasoned timber that shrinks more than 3%, or unseasoned timber more than 10%, in the first year is defective.
• Water against the slab edge from garden beds or paving you added later isn't a defect.

If cracks keep growing, an engineer may need to measure them over a few months to see whether the movement passes the limits. Write to the builder when you first see one. Waiting to see if it gets worse can cost you the insurance window.

Water after a storm: weather or a defect?

The guide's test for roofs, flashings, cladding, windows and doors is simple. They're defective if they leak under the weather conditions anticipated by the National Construction Code. Your home is designed for the wind and weather of its site. The wind rating is usually on the approved drawings.

So water through a window frame in an ordinary heavy downpour points to a defect. Write to the builder. Water driven in by a storm that went past what the home was designed for, or blown through a smashed window, is storm damage. That's a claim on your home insurance, not a defect.

The grey areas are common: a blocked gutter, a missing flashing, a door that was never meant to keep out driving rain. Take photos while it's wet, note the time, and check the Bureau of Meteorology record for that day before you call anyone. If the builder and you disagree, that's what QBCC inspectors are for.

• Queensland building contracts, explained
• QBCC home warranty insurance
• How to check a builder before you sign
• How long a granny flat takes
• Granny flats
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