Stage 6: Finishing properly
The final account, snagging, and getting your retention back.
The examples in this stage follow the Aldertons, an invented family - who they are is on the course page.
Three jobs: agree what it finally cost, get the snags fixed, and get your retention back on the date the contract says.
The third one is the one people lose.
6.1 The final account
The final account is what the build actually cost, agreed. The arithmetic is simple:
Contract sum plus every agreed variation plus or minus every provisional sum, adjusted to what the work actually cost minus anything in the contract sum that was never done, or was done by somebody else equals the final account.
If your variation register has been kept, this takes an afternoon. Every number is already recorded, with its date and the evidence that it was agreed. There is nothing to reconstruct.
If it has not been kept, this is the fortnight everyone dreads, and it is a fortnight of trying to remember what was said in a conversation in March, against somebody who remembers it differently and has an invoice.
Provisional sums are where the last surprises live. A provisional sum was a placeholder for work nobody had priced. At the end, each one is replaced by what the work actually cost, and the difference goes on your account either way. Ask for the evidence: what was the real cost, and what does it consist of.
Do not agree a final account with anything unresolved in it. Once agreed, it is agreed. If one item is genuinely in dispute, agree everything else and record the one item as outstanding, in writing.
| Description | Amount |
|---|---|
| Contract sum | £385,000 |
| Add: agreed variations, eleven of them | £14,280 |
| Adjust: provisional sums, drainage came in under | (£2,400) |
| Final account | £396,880 |
Against a construction budget of £385,000, that is £11,880 over, from a contingency of £17,700, leaving them £5,820.
It took nine days to agree, because the register already held all eleven changes with their dates and prices. That is the return on the four minutes a change.
The tool: the Final Account and Snagging Tracker.
6.2 Snagging and the defects period
A snag is something that is not right and should be put right before you accept the work. A defect is something that fails later, in the defects period. They are handled differently and it is worth keeping them separate.
The snag list. Walk the house room by room with a list. Be specific: “hairline crack to plaster above the kitchen door, left side” beats “cracked plaster”. Number everything. Record the date raised and the date fixed.
Walk it with the builder, not separately. A snag list agreed in the room gets fixed. A snag list emailed afterwards gets disputed line by line, because half of it is a matter of what is reasonable and that conversation goes better in front of the actual wall.
Expect a lot of them and do not panic. Thirty or forty snags on a new house is normal and says nothing about the quality of the build. What matters is how quickly they close.
The defects period is usually six or twelve months from practical completion. Anything that fails in it is the builder’s to put right. Keep the list running through it, and raise things as they appear rather than saving them up.
6.3 Getting your retention back
This is money you have already earned, and nobody is going to remind you it is due.
Retention is typically five per cent, released in two halves. The first at practical completion. The second at the end of the defects period, which is usually six or twelve months later, by which point you have moved in, the build feels finished, and it has completely left your mind.
Put both dates in your calendar the day you sign the contract, not the day you finish. Add a reminder a month before each. The builder holds no obligation to prompt you and, being human, will not.
Before the second release, get the snag list to zero. That is what it is for and it is the only hold you have.
£9,922, being two and a half per cent of the final account, released on the date the contract set. Thirty-four snags at handover, nought outstanding at release.
It was in their calendar from the week they signed.
6.4 The dates that follow you
Two more, and both have hard deadlines with no discretion.
The VAT reclaim. If you have built a new house or converted a non-residential building, you can usually reclaim the VAT on materials you bought yourself, under the DIY Housebuilders Scheme. The claim must be made within a fixed window from completion, and there is one claim only. Extensions and ordinary renovations cannot claim. Keep every invoice as you go, filed and sorted, because assembling it afterwards from a shoebox is where most of the value gets lost. The claim itself, and any question about whether your project qualifies, is a matter for your accountant or for HMRC’s own guidance.
Community Infrastructure Levy. If you claimed the self-build exemption, there is a follow-up form to submit after completion, within a fixed period, and the exemption can be lost if it is missed. Check your own authority’s requirements.
Your structural warranty. Register it, keep the document, and know its expiry.
And keep the whole file. Your cost plan, your variation register, your diary, your final account, the certificates and the warranties, in one place. You will want it when you sell, when you remortgage, and if anything ever fails.
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Stage 5: During the buildGuidance, not legal advice. Every figure in this guide is invented, including all of the Aldertons' numbers, and none of it is a cost guide or a benchmark. Rates vary by region, by the shape of a building and by how it is bought. Use your own figures, from your own market, and state the basis you used.
Beyond the course
If you want a stage taught rather than read - your own paperwork on the table, me walking you through it - Commercial Consultation is one session booked for exactly that. If you want the money side run for you instead, I run it month by month through Commercial Management while you build.