Building Contracts & Retention Sums

Many building contracts will be drafted with progress payments falling due throughout the building process and with the final payment being due on “practical completion”. Practical completion is usually when the job is mostly completed, except for minor cosmetic works, and before the Council issues their Code Compliance Certificate (‘CCC’). A CCC confirms the works have been completed in accordance with the building consent.

To protect your position as owner, we recommend at a minimum that the contract is checked and amended in two ways. Firstly, the progress payments should only be enough to cover the work that had been completed up to the date of that payment. Secondly, the final payment should not be paid until after the Council has issued their CCC. This is because the final inspection can determine that more work is required before the CCC is provided. If your builder has already been paid in full, they can be reluctant (or slow) in completing that final work for you.