E30. The difference between occupancy and completion

Welcome to the Building Design, Prime Time podcast. In this episode Frank and Amelia discuss the difference between an occupancy certificate and a completion certificate when you are building or extending you home. 

Frank highlights the huge problems that can occur when a completion certificate is not issues. Frank recalls a recent project where it had been several years down the track and there was no completion certificate issued for the works completed. 

Frank and Amelia also talk about the complexity of the process and the need for more education surrounding the types of inspections that would be a welcome addition to the process. 

This episode is not to be missed with some valuable information that is relative to anyone undertaking a new build or extension project. 


About us
Prime Design is a building design company locally owned and operated in Tasmania since 2004.  Our goal is to share as much valuable information as possible about the process of building design, extensions, and more. We will talk about a different topic each week. To suggest a topic you would like us to talk about contact us at info@primedesigntas.com.au

Disclaimer
The information provided on this podcast is for educational and informational purposes only and is not intended to be a substitute for professional advice, individual circumstances, or remedy. We strongly suggest you consult a qualified professional before taking any action based on the information provided in this podcast. The views, opinions, and information provided in this podcast are those of the hosts do not necessarily reflect the official policy or position of any other agency, organisation, employer, or company. All content provided on this podcast is provided “as is” without warranty of any kind. We make no representations as to the accuracy, completeness, currentness, suitability, or validity of any information on this podcast and will not be liable for any errors, omissions, or delays in this information or any losses, or damages arising from its use. We reserve the right to change content or delete any information provided on this podcast at any time without prior notice.

Transcript

E30. The difference between occupancy and completion

(0:08 - 0:39)

INTRO 

Hello and welcome to the Building Design, Prime Time Podcast, focused on providing valuable information for anyone looking to undertake a new build or extension project. We'll share our tips, tricks and stories from a building designer's perspective. 

(0:40 - 0:46)

Amelia: Hello and welcome to the Building Design, Prime Time Podcast. I'm your host Amelia and once again we're joined by Frank Geskus. 

Frank: Afternoon Amelia.

Amelia: Happy Friday Frank.

(0:47 - 0:52)

Frank: Happy Fridays, love Friday and we've got a long weekend. 

Amelia: We do. 

Frank: We're the luckiest people in Australia.

(0:52 - 1:02)

The north of Tasmania has a long weekend this weekend. 

Amelia: That's very exciting. Three days off, three days to party and three days to have no sleep.

(1:02 - 1:19)

Frank: What do you do on your weekends? Well, clearly that's not me because I'll be... I was about to say, is that something I don't know? 

Amelia: No, that's definitely not me at all. I'll be playing catch up in the garden. Yeah, I think we all play catch up once a week.

(1:19 - 1:22)

Frank: It's spring, she's gone berserk. 

Amelia: Oh yeah, yep. 

Frank: Love spring.

(1:23 - 1:38)

Amelia: Me too. Alright, we've got another topic to talk about today, something relating to occupancy and completion. 

Frank: Yeah, I want to talk about this because I've just seen some absolute shit shows.

(1:38 - 1:52)

There's no other way of putting this where people have... Maybe I've got to go back one step. When you get a house designed or extensions or whatever, right? You've got to get permits and I've spoken about this before. You go to your building surveyor and they get a permit.

(1:52 - 2:05)

They go to council and they get the actual stamp permits via the council and there's different versions of that. Notifiable and building works. This is in Tasmania by the way, just to be clear on that.

(2:05 - 2:13)

But at the end of it, there are two parts to finish it off. You get occupancy. That means you're allowed to go in there and live in there.

(2:13 - 2:19)

It's a good little hurdle, milestone. Then you've got a thing called completion. Now that's obvious what that is.

(2:19 - 2:26)

Everything's complete, everything's finished. All the paperwork's been handed in and signed off. It's very simple.

(2:26 - 2:36)

But if you've just got occupancy, it's not complete. So you have to have that completion certificate for everything to be... 

Frank: Hunky-dory. 

Amelia: Yeah.

(2:36 - 2:45)

Happy days, you know. The banks like it too, by the way. 

Amelia: Oh, do you have to give it to the bank? 

Frank: I haven't gone through the process, but it makes sense.

(2:45 - 2:51)

Banks would want to see a completion because they're a vested interest in it. 

Amelia: Sure. 

Frank: And all the project builders are really good at this.

(2:51 - 2:58)

It's the other ones that aren't. There's a lot of builders that are really good. The project builders obviously are very good because they do so many of them.

(2:58 - 3:11)

It's just part of their process. They get their completion certificates. But what happens if there's an extension, a pool, a deck, a shed, and they've got occupancy, but that's all? And then kind of forgets.

(3:11 - 3:15)

Life goes on. Owner pays the builder. He pays all his subbies.

(3:15 - 3:20)

Last payment. It's done. But then all of a sudden, time to sell the house.

(3:20 - 3:31)

They go to sell, and someone does a search. Well, you don't have completion on your house. What are you talking about? Well, I don't want to buy your house because it's not complete.

(3:31 - 3:34)

I've got an occupancy. Or the bank goes. I don't want to fund it.

(3:35 - 3:41)

Amelia: Yeah, that's true. Because your conveyancer would pick up in the searches whether… 

Frank: Under the 337s. This is in Tasmania.

(3:41 - 3:56)

There's a search they do. And think about it. If you don't have this completion from a finance point of view, I don't know about insurance, but anyway, you can live in it because you've got an occupancy, but it never got completed.

(3:56 - 4:02)

Imagine the devastation then. And it's like 5, 10, 15 years down the track. 

Amelia: That's really concerning.

(4:03 - 4:18)

Frank: Yeah. Because I've seen it just recently, and they had to go through a fairly robust process afterwards to get that completion. Because the certifier, or the building surveyor, may not even have his business anymore.

(4:18 - 4:24)

Might have retired, might have sold up, joined in with another business. The builder may not be in existence anymore. The Plumber.

(4:25 - 4:32)

See, and I need to point out, building and plumbing coincide with the completion. The plumbing has to be completed. Building has to be completed.

(4:33 - 4:39)

All the defects. And it passes all the requirements of the original permit. It's very simple.

(4:39 - 4:53)

It's finished. 

Amelia: So my question is, though, is there not a timeframe between when that certificate has to be issued? Is there no law on that? 

Frank: No. Not if no one provides the information.

(4:53 - 5:03)

So I'll use an example. What happens if the plumber never got the plumbing inspector do the completion? The responsibility lies with the plumber and the builder to do that. I'm only using that as an example.

(5:04 - 5:13)

But the building surveyor, certifier, hasn't received that. So he can't apply for his completion. He's applied for it at the permit authority of the council.

(5:14 - 5:16)

Hey, it's all done. Happy days. Here's my occupancy.

(5:17 - 5:20)

Here's my inspection. But they never received the plumbing. He doesn't know that.

(5:20 - 5:29)

It never gets sent out. 

Amelia: Wow. 

Frank: There's another form that a builder has to sign to say it's all been completed as per the drawings.

(5:29 - 5:37)

That's his thing to say, I've done it as per requirements. I've just had a situation where he didn't do it. And it was seven years ago the work was done.

(5:38 - 5:40)

Amelia: Seven years. Yeah. Wow.

(5:40 - 5:48)

Frank: And he's going, why do I have to sign this? And now lawyers are getting involved. He says, you have to sign it because you're the builder. But I've lost my records.

(5:48 - 5:52)

I don't know what I'm signing. No, I'm not joking about this. This is fair dinkum.

(5:53 - 5:58)

Amelia: Wow. 

Frank: And you wonder why I call it a shit show. 

Amelia: Yeah, that's really problematic.

(5:58 - 6:03)

Frank: Yeah, imagine the stress it causes the homeowner. 

Amelia: Oh, it'd be incredibly stressful. 

Frank: It's ridiculous.

(6:03 - 6:14)

Amelia: Especially if it's been years down the track.

Frank: Yeah, because it's been on sold and there was incomplete permits. And a conveyancer or a lawyer was involved and they noticed this.

(6:14 - 6:25)

They go, what the heck's going on here? They rang me because I was the designer and I says, well, I'm not aware of that because I talked to the building surveyor. The building surveyor confirmed, no, it's not been completed. This, that and the other.

(6:25 - 6:36)

And then the building surveyor actually said, by the way, I'm retiring soon. We need to get this stuff sorted. So they're getting it sorted and I'm seeing some of these emails and it's getting nasty.

(6:37 - 6:41)

Amelia: Oh, dear. 

Frank: But the builder did not complete. So, yeah.

(6:41 - 6:53)

And it got messed up and a few other things too. And it's not 100% the builder's fault. But at the end of the day, the builder's the primary contractor and they make sure all the subbies do what they need to do, you know, make sure they do it.

(6:54 - 7:02)

But to be fair, if they don't have good paper trails, because this guy said, I can't find my paper trail. I don't know if that counts in any way legally. I don't think so.

(7:03 - 7:20)

Amelia: They're supposed to keep records for a certain number of years, surely for tax purposes. 

Frank: Well, even then, yeah, because your licence under the regulations, there's a seven and 10-year requirement under the regulations. So I don't think this builder's going to get a rude shock.

(7:20 - 7:29)

Amelia: Well, imagine if this has happened once for him, if it's happened other times as well. So that's very concerning. There might be other properties out there.

(7:29 - 7:32)

Frank: Yeah, yeah. Yeah, exactly. And that's why I wanted to bring it up.

(7:33 - 7:48)

And this is an early takeaway. If you're getting something built, and I don't care how small it is, if it's a deck that's got a permit, you've got a pool, carport, shed, house extension, don't care what it is, get the completion certificate. You may have occupancy, that's fine.

(7:48 - 8:02)

But be, a dog with a bone, and get that completion, and do not hand over the money until you get it. Now, some of these builders are going to listen to this, they're not going to be happy with me saying that. But I believe you should be paying your final payment once you've got completion, and look at your contract.

(8:03 - 8:22)

Amelia: So the homeowner should be asking the builder for that? 

Frank: Yeah, but they're not, yeah, they should. But they're not educated, to be fair, on the contract and the law and what the terms mean. And it's so easy to be accidentally taken down for a ride, and the builder may have forgotten because no one's pressuring him.

(8:23 - 8:30)

And then I hear people say, oh, the building surveyor should follow it up. They're not paid to do that. They're paid to administer, not to chase up.

(8:30 - 8:40)

To be fair, a few of them do chase up. But people ignore their email sometimes too. Because we act as agent for a lot of our customers, and we facilitate the approvals.

(8:40 - 8:57)

So we organise the paperwork and arrange to go through council, do all that for our customers so they don't have to do it. We are CC'd in some of these emails, and we say, hey, we need to get this chased up, talk to the owner, send a few emails. The problem is people aren't aware of the level of urgency with this.

(8:57 - 9:12)

And you can't help when people don't respond. So the takeaway is you've got to act on these things and get your piece of paper, your completion certificate at the end. Works are complete.

Done. Thanks for coming. And I've spoken to a lot of building surveyors about this.

(9:12 - 9:23)

There's a big hole here. There's a really big hole. And since it's your biggest investment, or one of, if not the, that you really need to make sure it's done properly and done well, and you've got all your paperwork.

(9:24 - 9:38)

But it's hardly fair where the homeowner doesn't understand these terms. They've made it so complicated. All these words I talk about, occupancy, file certificate, completion certificates, they don't understand what they are.

(9:39 - 9:57)

Amelia: There's so many. Like, to be completely fair, before I started working here, I hadn't heard of half of the terms that are brought up. 

Frank: Yeah.

Form 35, Form 55. 

Amelia: Certificate of likely compliance. What does that mean? 

Frank: Form 75, Form 2. It's so confusing.

(9:58 - 10:09)

Not 75, 71. Oh, man. There's so many of them.

Amelia: It's crazy. There's so many. And I can completely understand why homeowners get completely confused, because it's ridiculous.

(10:09 - 10:15)

And you don't get taught this stuff. 

Frank: Well, who's going to teach you? 

Amelia: Exactly. 

Frank: Maybe we should run an online course for this.

(10:16 - 10:23)

Just a quick freebie online.

Amelia: I'd be keen to hear people's feedback on that, because it is a complex process.

Frank: It shouldn't be complex.

(10:24 - 10:35)

Amelia: It shouldn't be complex. 

Frank: But how about if we educate some people with putting some videos online, to say, hey, this is what's expected. This is what the form looks like, and maybe do a little flowchart.

(10:35 - 10:41)

Amelia: And this is the process, start to finish. 

Frank: Yeah, yeah. 

Amelia: This is how it works, and this is the order that it comes in.

(10:41 - 10:50)

Frank: But it all coincides with the contract as well. So you have a contract to build. I can't give advice on contracts, because I'm not legally trained, obviously.

(10:51 - 11:04)

Maybe, again, we get someone in to help us explain about the contracts and what your rights are. Because you could be using a contract from the HIA, which is a builder's, I suppose, association. You've got the master builders.

(11:05 - 11:26)

They all have these certain contracts that they use. Certain project builders that are in a franchise, they have their own type of contract. And it's worth getting legal advice on that when you sign a contract, but also at the end of the project, what you should get into your last folder or piece of paper or what you should hold on to.

(11:26 - 11:32)

Maybe that's something we could do. 

Amelia: Yeah, sounds like a good idea to me. 

Frank: Help educate a few people.

(11:32 - 11:45)

Amelia: Yeah. 

Frank: Yeah, so I think making people aware of this is really, really important so then they don't get caught down the track and the stress levels are off the show. 

Amelia: Oh, yeah.

(11:46 - 11:58)

Especially if it's been used down the track. 

Frank: Oh, yeah. Because I remember someone telling me about building statistics that the state government uses, and they can't believe how many projects get building approval, how few get completion.

(11:58 - 12:06)

Amelia: Really? 

Frank: Yeah, this was a number of years ago. I saw these stats, and the government uses these stats. Well, that tells me stuff isn't being completed.

(12:06 - 12:11)

Amelia: Wow. 

Frank: Yeah. I think they've made it too complicated for builders and plumbers as well, to be fair.

(12:12 - 12:31)

Amelia: Yeah, possibly it could be right there. And it's hard because it's literally the completion certificate is the last step in the process, whereas the other steps, it's like a domino effect. You can't really go from one to the next one without one of them being all done.

(12:31 - 12:43)

Frank: Exactly. But what I do like what building surveyors do, like there are inspections on the way through, and my personal opinion, there's not enough inspections, but that's a whole other thing. 

Amelia: There's not enough inspections.

(12:44 - 12:59)

You just said that the process is already complicated. 

Frank: It is, but inspections I don't see as a complicated part. An inspection is an independent person coming in to verify if the work has been completed adequately.

(12:59 - 13:06)

Amelia: I think you have mentioned this before, particularly for things like waterproofing. 

Frank: Bingo. There is no inspection for waterproofing.

(13:06 - 13:31)

So how do you know if it's going to be waterproof? You know, a builder can give a certificate from someone, and that's fine from a reputable firm, but if it's someone, you don't know if that person's going to warranty your waterproofing for a period of time or for life. And it's the biggest claim. I've been told it's the biggest insurance claim in the housing industry, waterproofing failures.

(13:31 - 13:51)

There again, maybe we need to get an insurer or a loss assessor, and that'll be really interesting. Maybe the guys at RACT might want to hop in on this because I'd love to have a chat to them about it because it blows my mind why that's not inspected, why insulation is not inspected. We're all about energy efficiency, but no one inspects to say if it's been installed properly and you haven't got gaps in your insulation.

(13:52 - 14:03)

A tiny gap in your insulation and the performance of your house goes down the toilet. 

Amelia: Really?

Frank: Oh, yeah. You know, the old days where you put these halogen down lights, we had to cut a hole through the insulation.

(14:04 - 14:17)

People went on, oh, yeah, you know, it's not that big a deal, calling bullshit. It has a big deal. You've got to get insulation tight, done well, no gaps, and it performs as it's supposed to.

(14:17 - 14:23)

If you've got gaps, it doesn't perform. It’s like putting a hole in your doona. 

Amelia: Yeah, yeah, I can see how that would be a problem.

(14:23 - 14:37)

I think we actually have brought that up on another podcast when we had our building inspector come in. Yeah, that's right, yeah. And he was saying that he's looked in ceilings and there's been, you know, insulation put in and it's still in the bags.

(14:37 - 14:41)

It's not even out of the bags. 

Frank: I know. It's just mad, isn't it? Totally mad.

(14:41 - 14:52)

And this is why I think inspections are a really good thing. Independent, reputable people being paid to look out for you, the consumer. Now, this is not against good builders.

(14:52 - 15:02)

Good builders will do this stuff properly. Some builders that aren't as, their attention to detail is not as good, that's where you have those problems. Now, when it's behind the wall, you can't see it.

(15:02 - 15:07)

Ceiling's easy. Floor, not as easy. But in the walls, imagine if there's a gap in the walls.

(15:08 - 15:24)

Amelia: Yeah, and I've even seen it looking at properties myself. I've looked at, you know, showers and all that sort of stuff. One of them I walked in and you could tell that the base of the shower, it looked like it had just been tiled straight over the top.

(15:25 - 15:34)

Now, I can't tell you for sure whether that's the case, but the tiles were different to the rest of the tiles. 

Amelia: Okay. Sounds a bit on the dodgy side.

(15:34 - 15:40)

Yeah. It had been done up this house to sell quickly. 

Frank: What I call a jam job.

(15:40 - 15:49)

Amelia: Yeah, and I'm pretty sure that it probably wouldn't be waterproof.

Frank:  Hard to say, isn't it? But how can you tell? 

Amelia: That's exactly right. You can't tell.

(15:49 - 16:00)

Frank: So, I believe more inspections are a good thing if they're done correctly, you know, documented properly. Happy days. And any builder that does a really good job and there's heaps of them, not a problem.

(16:00 - 16:07)

It's easy. And you're rest assured it's all happy days. Now, for a building surveyor, to get that completion occupancy, they need these inspection reports.

(16:08 - 16:16)

That's one thing they do do. They chase those up because it's legislated to have these as minimum part of the build. So, they chase that up.

(16:16 - 16:24)

So, the building surveyors do do a good job chasing those things, but they can't get all the information from the builder. They can't push it. Same with plumbing.

(16:24 - 16:36)

They cannot request plumbing inspections and finals. So, there's a few gaps in there. And I'm really surprised CBOS, our governing body, don't listen to the rest of the industry and do something about it.

(16:36 - 16:43)

Amelia: That's really surprising that it's not regulated. 

Frank: Yeah. Well, they expect people just to do all the right things.

(16:43 - 16:54)

Well, we live in a real world and people forget. People get slack running a business, family, life, all that. We're supposed to be all professional in what we do.

(16:54 - 16:59)

But I'll tell you what, I'll give you a hint, we're not perfect. No one in the industry is perfect. 

Amelia: We're not robots yet.

(17:00 - 17:13)

Frank: No. But if they're kept to account to supply all the right paperwork, I think it's a good thing. And there's some really reputable subbies and stuff that do a great job and they supply the paperwork without even thinking about it.

(17:13 - 17:24)

It's just part of their process. And waterproofing, I've just got to do a shout out to a company called Wet Seal. I hear nothing but great things about this company and they supply all their paperwork.

(17:24 - 17:33)

They guarantee it for a long period of time. Fantastic. I just saw some work they did on an apartment building that we were involved with and magnificent work.

(17:33 - 17:39)

Amelia: Well, it's good to know there are people out there doing the right thing. 

Frank: Yeah, yeah, but that's all they do. They just do waterproofing.

(17:39 - 17:47)

And they did waterproofing outside decks, balconies, all sorts of stuff. Not just the bathroom. So it's really, really cool stuff that they did.

(17:48 - 18:01)

So, yeah, it's pitfalls of the tail end of the job. You've got to get this paperwork. And, yeah, let's do some work on that education, eh? 

Amelia: Oh, 100%.

(18:01 - 18:14)

There's definitely stuff missing there that people don't know. 

Frank: Yes, and the other one too, we've mentioned this before, planning permit, when you receive it, doesn't mean you can build. 

Amelia: No, that's right.

(18:16 - 18:23)

Once again, you need those other permits. 

Frank: You need the building permit. It's what's called building and plumbing.

(18:23 - 18:27)

Amelia: Yes. 

Frank: Whereas planning is planning. Yeah, it's bizarre.

(18:28 - 18:33)

And I've seen that, something built, and they never applied for the building approval. They got the planning approval. 

Amelia: Oh, dear.

(18:33 - 18:38)

And that was 10 years after the fact. And that's, 

Amelia: yeah, that can be problematic too. 

Frank: Oh, it's horrible.

(18:38 - 18:48)

It is a horrible process. It's then now deemed illegal works, and you've got to go through a completely different process and just pain and stress everywhere. So get your permits, do it properly, and don't try and fix it afterwards.

(18:49 - 19:01)

Amelia: So let's just wrap up with some take-home points here. You mentioned about the building surveyor. Is that sort of the first point of contact if you're not sure?

Frank: Your building surveyor is your friend.

(19:01 - 19:07)

They're the guys making sure everything's done properly. They do a lot of the inspections, and they collect all the information. The inspection is a problem on site.

(19:07 - 19:23)

They give instructions to get stuff to get fixed or rectified. If there's changes to the build, it has to go through them. These guys are a very important part of the process, and they are there to help the homeowner because the homeowner engages the building surveyor.

(19:23 - 19:38)

So a builder can't, you know, a builder might recommend, use these guys, they're really good, fair enough. But at the end of the day, the homeowner has to choose who they use, and they are the pivotal point of the build, and they collect all the information. They're the ones that do the occupancy and the completion.

(19:40 - 20:03)

But to be fair, the way the legislation's written in Tasmania, the hands are tied a bit in pushing to get all the right paperwork from the different subbies and builders and plumbers and stuff. Yeah, so make sure you get your completion. Hold off paying until you get your completion, and I'm sorry, builders, you're going to hate me saying that, but you've got to get your paperwork in place, all your variations completed, everything.

(20:04 - 20:10)

Amelia: Okay. So get your paperwork, do your research, as always. 

Frank: Yeah, but work with your building surveyor.

(20:10 - 20:15)

Talk to them. They are good people, but listen to what they say. All right.

(20:15 - 20:21)

Amelia: We might wrap it up there, folks. Thanks for listening, guys. That was the Building Design, Prime Time Podcast.

(20:21 - 20:36)

Frank: See you guys. 

Amelia: See you next time. 

OUTRO

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