Taking Possession

You may be excited about a move in date, but this is where you must be the most careful. Your builder may want to be paid in full before you take possession. That sounds great, but you may have outstanding lending conditions such as a Code Compliance Certificate and a valuers completion certificate before the bank will release final funds.

You do not want to be in a position where the moving truck is parked outside and your builder won’t hand over the keys to your brand new home because your bank won’t make the final payment.

Make sure your builder understands that you have obligations to your lender and make sure you work with both your lender and your builder to reach a solution.

NewBuild Solution
With NewBuild, the solution is to use some of your contingency funds as a bank retention so your builder can be paid, and you can move in on time. But you will still need to meet the loan conditions once you move in before you can fix your interest rates. You need to be sure that by taking possession, your builder does not negate their responsibility of completing any outstanding items, and providing a Code Compliance Certificate. Sometimes it hard to get your builder back out once they are paid, so this is where a really good relationship with your builder is helpful.

When is it OK to take Possession?
NewBuild still recommends that you do not consider taking possession unless the builder has provided you a clear council inspection showing your home has passed, or that the items outstanding are of a minor nature. In todays environment, have a CCC is like gold, so do not compromise anything to ensure you receive this certificate. If you don’t get one, you homes value could fall dramatically.

It may take upwards of three weeks from the time your home passes inspection until you get your CCC, so make sure you manage this process well.

What is Required Before you Take Possession 
To take possession you must have accomplished the following:

• Your Valuer must revisit the home and declare it finished (issue a Completion Certificate), and also advise what, if any, work is incomplete. If you have not completed, or did not intend to complete all the work as has been reflected in your valuation, this can be a pitfall. If, for example, want to complete your driveway later, but if your valuer has included this in his original valuation, then the home will be deemed incomplete, and a retention recommended. This can cause a dely in possession, so it is important that your home is completed to the level reflected in your original valuation.

• Your local council must issue a code compliance certificate (CCC). The builder normally arranges this, but this can take some time to process so everyone needs to be proactive so you have a copy before taking possession (or know you can take possession without it). Newbuild recommends you plan on taking possession several days after the council inspector provides a clear field inspection to avoid that unnecessary “mad rush” and stress at hand over. 

• You must arrange to have homeowners insurance cover in place because your builders cover normally expires at the time you start putting your belongings into the new home. Caution here, once you start putting personal items in the home, even if the home is not quite finished, your builders insurance (Builders Risk Cover) may not protect your belongings, and in fact may not cover the house. 

• You will need to reconcile you final account with the builder. If there is not sufficient funds left in your construction loan account, then you must arrange to pay your builder the shortfall before you take possession. So give yourself a week before handover to review the final invoice, and don’t allow this to be left to the last minute!