cut & paste or bookmark! Keep this handy!

At the time of "substantial completion" (when the house is essentially ready to be occupied) the "retainage" funds that have been withheld from the previous contract payments will be reduced and a final payment will be made after a list of outstanding work and correction of deficiencies is completed to the owner's satisfaction. The list is normally made by an architect who represents the owner and who understands the contract requirements and the important quality issues. When an owner is not represented by an architect they must do it themselves. If you are not in the construction industry it is a difficult task and you will miss things but hopefully the money saved by forgoing professional representation will offset the loss. A list of deficiencies prepared at the end of one year would not trigger a payment and is therefore not a punch list but a list of warranty claims. Each item would need to be reviewed and negotiated independently with the original builder. If some of these problems were detected earlier and are now worse or more difficult to repair you would need to be able to explain why you did not notify the builder sooner.

Read your contract. It will specify whether any funds can be held back, for what, and for how long. It should also specify how punch list items are dealt with. There is no "rule", it's pretty much purely a matter of what you negotiated with the builder when you did the deal.

saftgeek - I hate to admit it but you are all too correct about far too many attorneys! I was a high school teacher for 20 years before deciding to go to law school and I have been deeply appalled by the how truly unethical and dishonest some lawyers are. In the six years I've been practicing law, I've run into more dishonest, downright sleezy lawyers than I met incompetant teachers in twenty years of teaching school... and people are always knocking teachers for being incompetant! Shyster lawyers make me ashamed of this profession just as incompetant teachers sometimes made me ashamed of the teaching profession. I would urge you or anyone else who has evidence of a lawyer behaving dishonestly or unethically to report them to their state bar association. It might not do any good but then again, it just might. At least in Texas, I think our state bar tries to disbar the unethical lawyers whenever they can find them. It certainly sounds like your ex-boss was exactly that type. I also truly am not trying to paint GCs as dishonest. I believe the vast majority are honest folks who do their best to do a good job when building a home and, if they make mistakes, try their best to fix them. BUT, as in all professions, there are some people building homes that are either lazy, dishonest, or so downright disorganized that the homeowner who ends up hiring one of them needs to be able to go to court and get help. And, unfortunately, the contract promulgated by the Texas Association of Builders is specifically designed to protect these bottom-feeding GCs from facing the music for their bad behaviour. The funny thing is, I KNOW that it was the TAB's lawyers who drafted the d--n contract that protects the bad builders, so when I'm knocking the contract, I'm also slamming some of the members of my own profession! I actually suspect that most builders who use the TAB form contract do so because it is available to them cheaply and they don't know any more about what it really says than the homeowner does. And, so long as there are no major problems with the build - nobody is any the worse off. But, I defy any honest person who has ever READ the TAB contract to argue with a straight face that it is a fair and balanced contract. Among other things, it requires the homeowner to waive the "implied warranty of habitability". Basically an implied warranty of habitablity means that courts have said when two parties enter into a contract for one to build a home for the other, there is an implied understanding between them that the finished home will be inhabitable. The owner doesn't have to make sure to insist that language be put into the contract SAYING that the house must be able to be lived in when comleted...the courts will assume that since the contract was for the building of a home, the finished product must be something one can inhabit or it is simply not a "home." But, just in case someone WANTS just a shell - or something like that - to be built, courts will allow the parties to agree to waive the "implied warranty of habitability". Asking the homeowner to waive the implied warranty of habitablity might be fair if the homeowner wanted to build something totally new and different and the builder said, "you know, I can build that for you but I don't think it'll be something you can live in when I get done, are you SURE that's what you want?" But, I think you would have to agree that, except in those rare instances, a house should be inhabitable, just like a car should be driveable, a suit should be wearable, and a wedding cake should be edible. Would you agree to buy a new car from a manufacturer who insisted that you agree to waive the "implied warranty of driveability"? Would you purchase a suit from a tailor who refused to warrant that it would be wearable? Would you order a wedding cake from a baker who refused to guarantee that it would be edible? Why would you buy a home from someone who refused to warrant that it would be habitable????? Nevertheless, the Texas Association of Builders - with the help of its attorneys no doubt! - realized that implied warranties can be waived and that most homeowners don't ever really read or understand the contract they sign. So they put language into the form contract that waives the warranty of habitablility on every single home built under it. That means the homeowner may think he is contracting for a turn-key home but, even if the house he gets is so defective that he cannot possibly live in it - say the sewage pipe has broken in the wall so that there that raw sewage has contaminated all the insulation - the homeowner cannot argue that the builder breached the contract by building an UNIHABITABLE house. Fair????? The TAB contract also requires that the owner agree upfront to "binding arbitration" in the event of a dispute. This doesn't sound too bad...unless you happen to know a couple of facts about binding arbitration. First, arbitration is MUCH MORE EXPENSIVE than small claims court even though most building disputes are going to be over amounts small enough have brought the claim in small claims court. Second, arbitrators are selected and PAID by the parties to the dispute which means that arbitrators make more money if they are selected for more cases. If an arbitrator wants future work, they have to make sure that the party that is more likely to bring them future business is happy. Care to guess which party is more likely to NEED to hire an arbitrator for a second or third or fourth construction dispute? Some studies have shown that homeowners win less than 5% of claims that go to arbitration but win about half of claims that are tried in a court of law. Even those few homeowners who are nominal winners in arbitration almost never win enough money to actually repair their homes! The TAB contract also requires that the builder receive his final payment, in full, (i.e. NO RETAINAGE) at the time of the final walk-through even though it also specifies that a punch list of items to be corrected/completed/repaired will be made at this same time. In theory the builder is supposed to return and finish the punch list. But, WHY should the unscrupulous builder bother? After all, he has already been paid in full AND the homeowner can't even sue him in small claims court due to the binding arbitration clause I already mentioned? Do you think that is fair? I could go on and on about other clauses that are in the TAB contract but I suspect I've made my point. A builder who insists on using the TAB contract after having some of its many unfair clauses pointed out to him may not actually BE dishonest but, IMHO, neither is he the kind of straight shooter I really want to deal with. Straight shooters are willing to play on a level playing field.