Home Buyer 101: The Construction Punch List
You’re doing the final walk-through of your newly built home and things aren’t all finished or touched up to both the builder and your specifications. To keep track of all the items that remain outstanding, you create what is called a punch list for the general contractor.
Just What is a Punch List?
A punch list, also called ‘snag list’ is essentially a to-do list for the builder or contractor to complete within a certain amount of time. It’s usually prepared towards the end of a construction project and documents all the work that doesn’t conform to the contract provisions.
The punch list could include things like incorrect installations (flooring, cabinetry), or incidental damage to existing finishes (floors), material and structures. For instance, you might notice that one room was poorly painted or that the grout in the master bath wasn’t finished. Here are a few other things that could make the punch list.
- Damaged materials (drywall, cracks in the driveway)
- Plumbing and electrical defects (socket not functional)
- Issues with mechanical components (thermostats, ductwork, appliances)
- Lack of hardware (handles on a vanity, shower components)
How to Create a Good Punch List
A good punch list is well itemized and thorough because it defines the scope of the project. Since it needs to be understood by the construction manager and perhaps, entire construction team (sub-contractors), you want to make sure that the details are clearly understood by all involved. In other words, you would say “faucet in the powder room on first-floor drips and needs to be fixed” versus “fix leaky faucet.”
Be Prepared for a Client Walk Through
Some realtors will set up a meeting with you before you meet with the contractor. For this or any initial walkthrough, you should bring four things: (1) removable blue tape, (2) pen/pencil, (3) notepaper, (4) plans/blueprints or any specifics if you have access to them. This precludes the fact that most people have a camera with them albeit on their smartphone. Pictures are worth a thousand words, after all.
It’s All in the Details
On your walkthrough, you can essentially put blue tape wherever you see a trouble spot. This discovery session is also when you can ask questions to better understand what work was done and what is left. Make sure to consult with someone you trust and don’t be shy to let your eye for detail take over because this is the stuff a good punch list is made of. If you do meet with the contractor separately later, s/he may add onto your initial findings which is a good thing too. Although it’s obviously preferable that the quality control is in place during the construction to minimize outstanding issues.
Check the List Twice
After your first blue tape spree, you can go back through to clearly itemize on paper each area that you taped. You can use headings like “living room” or “basement” and go room by room. Of course, since we have all but given up handwritten lists with the exception of grocery store post-it notes, convert this into an email thread that everyone sees and agrees on. Alternatively, your realtor might do this for you – though you should still check their list twice.
How to Ensure the Punch List is Completed
Possibly the most crucial step to getting everything checked off on your builder to-do list is to work with a well-established builder who has a solid track record of getting the job done on time. It’s best to buy a new home from a reputable builder who has resources (insurance), a presence in the community at large, and a commitment to having happy homeowners. In other words, they have a good track record.
Getting the Job Done
Hopefully, yours isn’t a long punch list, but even if it’s short and sweet, “incomplete” whether on a football field or your home can pack a punch in terms of frustration. So how do you ensure this list is completed in a timely fashion?
First off, remember that getting your punch list completed is a process with a time to completion that varies depending on what you agreed on. Reputable contractors want to ensure good workmanship and that your list is efficiently taken care of. And, while the contract may set a time frame or date for completion, it may also stipulate reasons that the date may be altered.
That stated, in the course of ‘getting it done,’ some items may come up that add to the scope of a project. In this case, the subcontractors brought in have to communicate the extra costs and work to be scheduled. Timelines, scheduling, and follow-ups are within the scope of general contractor duties. Ideally, yours is professional and reliable.
You will know soon enough if “that will be done Tuesday by the plumber” turns into an untruth or unfulfilled promise. If it happens once, okay – things happen – but if it keeps happening, this is called a pattern of misrepresentation.
4 Tips to Navigate the Punch List Process
Now, in a perfect scenario, you’re able to hold back money until every detail of your new build is to your satisfaction, and as all the work unfolds seamlessly as you sit back and unpack. That said, you may come to a settlement, agree on a 30-day punch list and everyone signs off smilingly. But it’s now day 7 and things are not moving forward. Here are four tips to help you navigate the punch list process when it’s anything but utopian.
- Communicate: You may have the contractor’s cell number and he says ‘call or text’ anytime. Nonetheless, you want printable documentation, not ‘s/he said – I said,’ so use emails to keep your conversations on the record and print copies of any text messages.
- Schedule: Make sure to communicate your own schedule or availability during the time the punch list is being completed. Think of how to keep valuables safe and if you have to give someone a key, make sure to change your locks once all the work is done and things are back to normal.
- Maintain your punch list: When an item is complete, tick it off. You can email this list back to the contractor with a ‘thanks, this was done today’ and ‘when is the painter coming to complete item 12?’
- Take Action: You don’t have to nag or nit-pick. But you may have to manage and meet the construction superintendent from time to time especially if the end of the contracted time to punch list completion is not being respected. A friendly reminder that the final day is approaching and ‘what might we expect?’
What If the Builder Doesn’t Complete the Punch List?
In the event that it’s day 29 on 30 and you have uncovered mismanagement and patterns of non-compliance on the part of the builder, you may need to think of bringing in some muscle (figuratively). Yes, a developer should (in an ideal world) agree in writing to pay your legal fees if you have to sue to enforce the punch list agreement. But does this always happen in a seller’s market? No.
For buyers who don’t or can’t negotiate a punch list escrow, the motivational options are sparse and definitely not pretty. Here are four action plans to keep in mind when you feel like punching the wall.
- Litigation: Think lawyer, small claims court, etc. Ultimately, you should know what’s in your contract. Then, seek to hire a lawyer experienced with residential real estate law and with the contract laws of your community. Your builder may be reasonable enough not to want to go to court and lose, but he may also go through this often and have ways to hide his/her money – sometimes the case with an LLC.
- Team Up: The truth is, people do end up in litigation and may win the judgment. However, the cost of suing over a punch list may be higher than the cost of work at issue. Of course, if you are buying in a new community where others may have similar issues with the builder, a collective action might be effective. This could take some sleuthing on your part (hi neighbor… I was wondering…) or googling a city docket to see if there are outstanding court cases with your builder.
- Complain Formally: Alternatively, you could contact the DA and/or Attorney General’s office to report a complaint into a fraudulent sales process—whereby the builder committed to complete punch list work with no real intent to do so. Sometimes, an Attorney General’s office may be willing to intervene – specifically if you have neighbor-allies and the builder has a history of complaints.
- Consumer Protection: You could also call city or county building officials (licensing departments for example) if you think there is a code violation. Many local jurisdictions also have special consumer affairs offices that deal with complaints about new-home builders or contractors. For these processes, your document trail will come in handy, so make sure to keep them in order and use certified mail for official correspondence.
If you end up with zero items on your punch list, you have reason to uncork a bottle of wine – and your contractor will too. But if there is no punch list party, you need to think long term. Certainly, if you aim to flip your house in the future, any big issues that go unresolved will not get better with time. If the items are minor, you might be better off just getting them done yourself and putting the punch list behind you. Either way, stay calm, keep your documents in order and proceed with your best interests at heart.