Punch lists in the USA: substantial completion, retainage and the walkthrough
Americans do not snag — they punch. The punch list is the same document as a British snag list: everything that is incomplete or not to spec, found as the job nears the end. The name is said to come from punching a hole in the paper next to each item as it was done.
Commercial construction
Substantial completion
The punch list hangs on substantial completion — the point where the owner can use the building for its intended purpose. On projects using the AIA documents, the contractor prepares its own list when it believes the work is substantially complete; the architect then inspects, adds what was missed, and issues the certificate of substantial completion with the punch list attached.
Substantial completion matters well beyond the list: it usually starts warranties, moves responsibility for insurance and utilities, and stops delay damages.
Retainage
Owners commonly hold back a percentage of each payment — often 5–10%, depending on the contract and the state — until the punch list is finished and the job is closed out. That retainage is what makes the last 2% of the work actually happen. Many states regulate how much can be held and how quickly it must be paid.
The one-year correction period
Under AIA A201 the contractor must correct work found not to conform to the contract documents within one year of substantial completion, once the owner gives prompt notice. This is not the limit of the contractor's liability — it is a duty to come back and fix things, on top of any warranty and the general law. Diarise a walk-round at around eleven months.
New homes
The final walkthrough
Buyers of a new home do a final walkthrough (sometimes called a pre-closing or "blue tape" walk, after the tape used to mark defects) with the builder's representative before closing. Everything found goes on a punch list the builder signs. A private home inspector is worth considering even on a brand-new house: builders' own inspections focus on getting to closing.
Builder warranties
Many builders offer a written limited warranty, often in a "1-2-10" shape: one year on workmanship and materials, two years on plumbing, electrical and HVAC systems, and ten years on major structural defects. Terms vary a lot by builder and state, so read yours. As with every country on this list, cosmetic items are the ones that expire first.
What makes a punch list that gets closed
- Each item assigned to a trade, with a location someone else can walk to.
- A photo per item, taken when it was raised and again when it was closed.
- One list, not one per inspector — duplicates are where items get lost.
- A date on every status change, which is what closes out retainage.
For the terminology differences in detail, see snag list vs punch list.
This is a general guide, not legal advice. Periods and rules change, and your own contract can add to them — check it, and take professional advice before relying on a deadline.