Practical Completion
Last reviewed 13 June 2026 by Nick Lim, finance broker (FBAA).
Practical Completion is the point in a construction project when the building is finished enough to be used for its intended purpose, even if minor defects remain. It triggers the final progress claim and the start of the defects liability period, and it is usually when the balance of retention begins to be released. Lenders generally need the certificate of practical completion or an occupancy certificate before the final drawdown.
Why Practical Completion Matters
Practical completion is the milestone that releases the last funds and starts the clock on fixing defects.
- Building usable for its intended purpose
- Triggers the final progress claim
- Starts the defects liability period
- Begins release of retention
- Often required before the final drawdown
Common Features of Practical Completion
- Certified by the superintendent or builder
- Minor defects can remain on a list
- Starts the defects liability period
- Hands the building over for use
- Tied to the final payment
Official reference: business.gov.au
What is practical completion?
The point where a build is usable for its purpose, even with minor defects. It triggers the final progress claim.
Does practical completion mean zero defects?
No. Minor defects can remain on a list to be fixed during the defects liability period.
Why does practical completion matter for a loan?
Lenders usually need the practical completion or occupancy certificate before the final drawdown.
What happens after practical completion?
The defects period begins and the balance of retention starts to be released.
Who certifies practical completion?
Usually the superintendent, architect or builder named in the contract.