Practical Completion and Handover in ACT Building Contracts

What it is

Practical completion is the moment the work is finished enough for the owner to take the keys, with only minor items outstanding. It is when the final claim falls due, when the risk in the building passes and when the defects liability period starts.

In the ACT, practical completion means whatever your contract says it means. Nothing more.

The Building Act 2004 does not define practical completion

There is no definition of practical completion in the Building Act 2004 (ACT), and none in the Building (General) Regulation 2008 (ACT). Section 89C lets a regulation prescribe standard conditions and the meaning of terms used in a residential building work contract, which is exactly the power a statutory definition would sit in. No regulation has ever been made under it.

So there is no statutory test for practical completion in this Territory, no statutory notice of it, no statutory defects liability period and no statutory right to withhold the final claim. If the contract is silent or loose, the gap is filled by ordinary contract construction rather than by the Act.

What the Act does define is completion day

The Act defines a different concept, and it is the one that matters for every statutory clock. Under s 85, completion day for residential building work means the day the work is completed or the day the contract relating to the work ends, whichever is the later. Section 85 (2) adds that the work is taken to have been completed no later than the day a certificate of occupancy, if any, is issued for the work.

Read the two halves carefully, because builders routinely conflate them:

• completion day is not practical completion. It can fall later, because it takes the later of completion and the end of the contract
• a certificate of occupancy caps it. Once one issues, the work is taken to be complete no later than that day, whatever the contract calls it
• ACT Government guidance restates the same rule: the completion day is the day the work is completed or the day the contract ends, whichever is later

Your contract can define practical completion however you like. It cannot move completion day, and completion day is what the statute counts from.

The final claim, defects and withholding

Because nothing is prescribed, the handover mechanics are wholly contractual. A workable ACT clause has to carry the definition of practical completion, the inspection and notice process, the minor defects that do not prevent it, the period to rectify them and what the owner may withhold from the final claim. None of it is supplied for you.

What survives regardless of the contract are the s 88 statutory warranties: work carried out in accordance with the Act, in a proper and skilful way and in accordance with the approved plans, using good and proper materials, and fit for a purpose the owner made known. Any provision limiting those warranties is void, so a handover clause cannot sign them away.

The 2 year notice that reverses the onus

This is the provision to know, and the date on it decides whether it reaches your job at all.

Section 89F was inserted into the Building Act 2004 by the Property Developers Act 2024, schedule 2, amendment 2.17. No commencement notice was made for it. It commenced automatically on 10 July 2026 under section 2 (3) (b) of that Act, which starts the remaining provisions 2 years after the notification day of 10 July 2024. A consolidated reprint published before that date will not show the section, so check the date on whatever reprint you are reading.

Under s 89F, an affected party may give the builder, and any property developer, written notice within 2 years after the completion day requiring defective work to be rectified. If that notice is given, then in any proceeding where the affected party claims the work is defective it is presumed to be defective and able to be rectified unless the contrary is proven.

That is a shift in the burden of proof, bought with one letter. An affected party includes the owner of the building or the land, whether or not they were a party to the contract. The section does not cut down the s 88 warranties or any damages claim.

Then read s 89F (6), because it is the limit that settles most jobs. The section does not apply to residential building work carried out before it commenced, or under a contract entered into before it commenced. An ACT contract signed before 10 July 2026 sits outside s 89F for the life of that job. It reaches new work rather than the book you are already building out.

For a builder, on the jobs it does reach, the handover file is the defence: dated inspection records, the defects list agreed at handover and evidence of what was rectified and when.

The clocks that run from completion day

Three periods start at completion day or close to it:

• 6 years for a structural element, being a load-bearing component essential to the stability of the building, or a component including weatherproofing forming part of the external walls or roof
• 2 years for a non-structural element
• 2 years for a s 89F rectification notice, on work carried out under a contract entered into on or after 10 July 2026

Over the top sits s 142. A building action cannot be brought more than 10 years after the day a certifier gives a certificate of completion, or if there is none, the day of the last inspection by the certifier, or if neither applies, the day the building was first occupied or used. A shorter limitation period under another Territory law still wins.

Handover is not the end of exposure in the ACT. It is the day the clocks start.