Legal Insights

Inspections and Punch Lists

When a buyer works with a builder to plan the construction of new home, the buyer will have an opportunity to look at models, drawings, plans and specifications. The combination of these documents gives the buyer a general idea of what the home will eventually look like. As the construction progresses, the idea takes form; however, until the process is complete and the buyer has actually walked through the completed structure, the buyer has no idea whether everything has been completed as imagined and in a workmanlike manner. If the buyer does not walk through the completed home and perform a detailed inspection before the closing takes place, the buyer will have waived a right to have the builder complete overlooked items in a workmanlike manner.

The Vision Takes Form

A buyer can get a good idea of how the construction is progressing by scheduling regular walk-throughs of the property. Usually, contractors will not allow a buyer to walk on the property on a whim, but a contractor will agree to walk-throughs that are scheduled to correspond with the completion of each phase of the project. At those times, the buyer will have an opportunity to make sure that the contractor’s creation matches the progress that should be completed within that phase and that the progress corresponds to the buyer’s vision.

Ask Questions and Check for Understanding

Walk-throughs are opportunities to ask questions about each phase of the construction project. Details should be noted, and completion should be documented. If payment is to be made upon the contractor’s completion of a phase, the buyer should notify the person responsible for making the payment if the project is not proceeding according to schedule.

Final Walk-through and Punch List

The final walk-through takes place just prior to closing. At that time, the contractor essentially is representing that he has completed the project according to the agreed-upon models, drawings, plans, and specifications. What remains is for the buyer to walk through the home and determine whether everything has, in fact, been completed, or whether there are items that remain undone or missing. Any missing or defective construction that the buyer can observe should be noted on a punch list.

A punch list is a document that identifies items that have been overlooked in the plans or that have to be remedied before the buyer determines that the home is acceptable. The inspection can be done by the buyer or by a trained home inspector. Either way, completion of a punch list is a form of insurance because it gives the contractor a set period of time within which to complete the items. The period is usually one that is reasonable, and it may be extended by agreement of the parties.

Merger

If the buyer does not fill out a punch list, the buyer asserts that he or she accepts the home as it has been tendered to him or her — defects and all. In such case, the buyer waives his or her right to require the contractor to complete or remedy any overlooked items or faulty construction that are readily apparent. If a punch list has been completed, it will usually be made a part of the closing documents and will not merge into the deed at closing. If the contractor fails to complete the items on the punch list in a workmanlike manner and within the time specified, the buyer may file a lawsuit to compel completion or to obtain damages for the cost of having the work completed by another contractor.

June 20, 2014 Share This