Understand when you are breaking the law
We know that most licensees do the right thing. However, sometimes things go wrong and that is when the QBCC has a duty to get involved. Find out what is an offence and when you might be breaking the law.
We recommend that licensed and unlicensed contractors in the building and construction industry take the time get to know what is considered an offence under the Queensland Building and Construction Commission Act 1991 (QBCC Act) or the Building Industry Fairness Act 2017 (BIF Act) and understand the consequences of breaking the law.
Whether your job is to run a building site or you are part of a team of contractors, it's important to know your responsibilities to avoid fines or prosecutions.
How can you commit an offence?
While in some instances you may be unaware that you are committing an offence, many of the laws are just common sense and about doing the right thing.
Being aware of non-compliance offences will help you to avoid the consequences, some of which are serious and can include going to court or being the subject of a public warning.
If you are not sure of the rules you are advised to contact the QBCC, seek independent legal advice or your relevant industry association.
If your licence is suspended or cancelled, you can't continue to carry out any building work. You will need to seek legal advice regarding the consequences that licence suspension or cancellation has on your on-foot contracts.
The QBCC has a zero tolerance policy to unlicensed contracting in Queensland. Some breaches of the rules can result in the courts imposing a period of imprisonment.
For people applying for a QBCC licence you must not quote or tender on a job until your licence has been granted and is showing as active in the QBCC register.
Unlicensed contracting is also known as unlawful building work. A person who carries out or offers to carry out building work without holding the appropriate licence has committed this offence. The offence can be committed by someone who does not hold a QBCC licence or by someone who is working outside of what their licence allows them to do.
If you don't hold a contractor's licence for the scope of works you wish to perform, you can't provide quotes or tenders for building work, sign a building contract, or do the work itself, and you'll need to stop work immediately until you become licensed again.
The only persons that can carry out building work and don't require a licence are those persons that have an exemption. The most common exemption is an employee of a licensed contractor. The employee doesn't require a licence providing they are lawfully employed by the licensed contractor and carry out work, which is allowed under the licence of their employer. If your employer has his licence suspended or cancelled, you may be committing an offence if you continue to work during the period of the suspension and cancellation.
Example 1—A QBCC licensed painter employees 3 painters to paint a house. The three employees don't require a QBCC licence to carry out the painting work.
Example 2—A QBCC licensed plumber employs a plumber to perform plumbing work on a house. Plumbing work is considered occupational work. The employee doesn't require a QBCC contractor's licence but requires an occupational licence to carry out the work for his employer.
Don't think it's ok to let someone else use your licence, and don't be tempted to use someone else's licence.
This is known as licence lending or licence borrowing. If you're caught, it will have long term consequences for both you and the other contractor. If you lend your licence the QBCC can pursue you for the costs to rectify the defective work.
Examples of licence lending include:
- an unlicensed person pretending to be a licensee e.g. using a false licence number, a cancelled licence number or a licensee's QBCC licence number
- a licensee allowing an unlicensed person to use their licence
- a licensee making use of another licensee's licence (using the licence card, licence certificate or PIN). An example would be a QBCC licensed tiler making use of the licence number of a QBCC licensed builder to carry out a bathroom renovation.
- licensee paying QBCC insurance on behalf of an unlicensed contractor.
We regularly conduct home warranty insurance audits to ensure every policy taken out represents a true and accurate reflection of the contractual arrangement between the homeowner and the contractor who has taken out the QBCC insurance.
It's important to always pay the premium for any residential construction work over $3,300.
All contractors who perform insurable residential construction work with a contract price of more than $3,300 (goods, services and GST) must pay a premium under the Queensland Home Warranty Scheme.
This is to protect the homeowner from losses through non-completion, subsidence or defects – where contractor refuses, or is unable, to rectify
The QBCC home warranty insurance needs to be paid within 10 business days or before work starts, whichever comes first.
A homeowner receives a Certificate of Insurance when a premium has been paid. If you as a home owner have not received a certificate you should check that the contractor has not paid a premium by contacting us or completing an insurance search.
Where you are able to provide evidence that a contractor or builder has not paid home warranty insurance you can lodge a complaint.
Only licensed contractors can take out home warranty insurance. If your contractor does not mention QBCC home warranty insurance and the work to be carried is insurable work then you should check on his licence status with the QBCC before engaging them.
Subcontract & commercial contracts
Whether you are working directly with a client or have an agreement with a builder to carry out subcontract work, failing to follow the conditions in your contract can be an offence under the QBCC Act and can expose you to a claim at QCAT.
Part 4A of the Queensland Building and Construction Commission Act 1991 (QBCC Act) requires that commercial contracts must be written and contain certain basic information.
The QBCC provides a commercial sub-contract agreement that when filled out correctly will ensure that you comply with your legislative obligations and provide better protection for your commercial interests.
Schedule 1B of the Queensland Building and Construction Commission Act 1991 (QBCC Act) governs the rules covering contracts for domestic building work in Queensland for contracts dated on or after 1 July 2015. The rules apply to all building contractors who carry out domestic building work for building owners (home owners).
Unlicensed contractors are regularly fined for breaches of these offences as well as being fined for working unlawfully.
The requirements are that contracts for domestic building work have to be written, dated and signed and contain certain basic requirements.
Your licence will be affected if you don't run your business with honesty and integrity.
Getting a licence involves more than just providing information about your experience and qualifications. To hold a licence, you must be a 'fit and proper' person. For companies, this includes directors, secretaries and other influential people.
In deciding whether you are fit and proper to hold a contractor's licence, we consider:
- Your honesty and integrity in commercial and other dealings.
- Any failure to carry out commercial or statutory obligations and the reasons behind the failure.
- Whether you have done any Tier 1 defective work.
- Whether you have failed to pay an infringement notice for an offence under the QBCC Act and SPER considers you an enforcement debtor.
- Whether you have had an interstate or New Zealand licence cancelled or suspended.
- Any other relevant factor (e.g. criminal history). If an individual has been convicted of any criminal offence (excluding traffic offences) within 10 years, upon application, they will be required to provide the QBCC with a National Police Certificate no older than 30 days and obtained through an Australian State or Federal Police establishment. Police checks from private providers will not be accepted by the QBCC as these reports may not include all police history information.
If we have evidence that suggests you don't meet the fit and proper criteria, we won't grant you a licence, or we'll suspend or cancel your existing licence.
You have the right to appeal a decision through the Queensland Civil and Administrative Tribunal.
You need to make sure that any advertising you do includes the correct wording.
If you hold a QBCC licence you must include your licence number in all your advertising, including on social media. Penalties may apply under the QBCC Act for failing to do so.
Worse still, if you're unlicensed and claim to offer building or plumbing work which requires a licence, you could face tough penalties.
Consumers want to use trade contractors who are appropriately skilled and licensed for the work they're paying for. They want to know they have protection, where applicable, from the Queensland Home Warranty Scheme, and that the work will be carried out safely.
Even if you are appropriately licensed, make sure that your advertising is compliant both online and off.
If you are advertising for general maintenance under $3,300 (including all materials and labour) you must state in your ad that you can only do work up to this value. Remember, some work such as plumbing and drainage work, requires a licence for work of any value and you cannot advertise to do any of this work unless you hold the required licence.
Non-compliant advertising and unlicensed people advertising to do licensed work could result in warnings, fines or prosecution.
If an adjudicator has made a decision that you are required to make payment, it is an offence to not comply
In making a decision, the adjudicator will decide:
- the amount owed (if any)
- the due date for payment
- the interest rate that applies.
When the adjudicator makes a decision, they will notify both parties and request payment of fees. After receiving payment, a copy of the decision will be given to both parties and the Adjudication Registry.
An adjudicated amount must be paid within 5 business days after a copy of the adjudicator's decision is received or by a date decided by the adjudicator.
Once you have paid the adjudicated amount you now have an obligation to notify the QBCC that the payment has been made within 5 days of you making the payment.
If the adjudicated amount is not paid in full by the due date, the claimant may be able to:
- give a payment withholding request to the higher party in the contractual chain
- give the respondent a written notice of intention to suspend work
- lodge the adjudication certificate as a judgment debt in court (a fee may apply)
- if a judgement debt has been lodged, claimants who are head contractors may register a charge over property
- lodge a monies owed complaint form with the QBCC for investigation if the respondent is a QBCC licensee (no fee applies).
A licensee that does not pay a debt as and when the debt falls due may be in breach of QBCC licence conditions. Licensees that fail to pay debts risk licence suspension or cancellation.
You must provide a payment schedule within 15 business days after receiving the payment claim (invoice). If you pay your invoices on time than there is no requirement for a payment schedule.
Under the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act), a person who receives a payment claim is known as the respondent. A respondent is a party to the construction contract who has requested the work be done or goods or serviced to be provided and is or may be liable to make payment.
If you are a respondent, you are required under the BIF Act to 'respond' to all payment claims received – a payment claim should never be ignored.
Failing to respond may be an offence under the BIF Act and could trigger the following consequences for anyone under a construction contract:
- being fined by the QBCC
- losing your right to respond if the claimant pursues certain payment dispute resolution options
- having the claimant suspend work, instigate subcontractors' charges or purse the debt in court.
As a QBCC licensee, you may also face additional disciplinary action from the QBCC if the claimant lodges a complaint against you, including:
- accruing demerit points against your licence
- having your licence suspended or cancelled
- disciplinary action against you or your company.
A party can notify the QBCC of non-payment of a payment claim by lodging a monies owed complaint.
Meeting minimum financial requirements (MFR) is a requirement for all contractor licensees.
MFR is the minimum net tangible assets (NTA) and current ratio required to ensure your business is financially sound and sustainable.
The QBCC will calculate your ratio based on the information you provide. You should not give false or misleading information about your MFR to the QBCC or to another person, for example an accountant, which is submitted by the other person to the QBCC.
Part of the MFR requirements is for licensees to submit annual financial reporting information to the QBCC. When you submit information, the QBCC will conduct a financial health check of your business to assess whether you have the minimum assets or ratio. When you and others in the industry operate financially sound businesses, everyone gets paid for their work.
There are exemptions from financial reporting requirements for some licensees.
Contractors must advise sub-contractors of the impending end of the defects liability period.
Contractors need to give a Notice of end of defects liability form (PDF, 41KB) to subcontractors advising of the impending end of the defects liability period. Non-compliance is an offence.
This notice must be given within 10 business days before the end of the defects liability period or within 5 business days after receiving a notice if the defect liability period is linked to another building contract. This requirement does not apply to a contracting party who enters into a building contract as a principal.
It is now an offence to withhold a subcontractor's retention money without a reasonable excuse. There is a maximum penalty of 200 units or one year's imprisonment.
You must notify us of any safety matters either by telephone or in writing.
A QBCC licensee who is in control of, or carrying out building work on a building site must notify the QBCC if:
- a notifiable incident occurs on the site
- a person on any site where they are carrying out building work fails to comply with a notice or injunction issued under the Work Health and Safety Act 2011 (Part 10) or the Electrical Safety Act 2002 (Part 11A).
A notifiable incident is defined as the death, serious injury or illness of a person, or an incident that exposes a person to a risk of serious injury or illness.
Licensees must notify the QBCC in the fastest way possible. The quickest and easiest way is to use the QBCC's online notification form. You will need to provide some important information, such as the date and time of the incident, the address where the incident happened and why the accident occurred.
Penalties or disciplinary action can apply for failing to notify the QBCC of an incident, so licensees are encouraged to notify the QBCC as quickly as possible.
The notice must be provided to the QBCC within 48 hours of the incident occurring. Notifications received after this time could result in your breaching Section 54A of the QBCC Act.
If you are given a direction to rectify, you risk a fine if you delay or obstruct the rectification work.
Not complying with a direction to rectify can result in the following actions:
- applying up to 10 demerit points to your licence
- prosecuting you in the tribunal/courts (maximum penalty is $34,462)
- fining you a penalty (up to $2,757)
- disciplinary action in the Queensland Civil and Administrative Tribunal (QCAT) or the Courts
- applying conditions to your licence
- issuing show cause notices that may result in suspending or cancelling your licence
If a person delays or obstructs the rectification of work required by a Direction to Rectify, they may receive a fine or be prosecuted.
It is your responsibility to supervise and coordinate tradesmen working on site, and this includes any defects in subcontractors' work.
If you are a nominee or site supervisor, you must ensure the work done is supervised by an appropriately licensed person.
Construction managers have the same obligations as for a licensed contractor. You must make sure that any work carried out by licensed contractors for a principal (under construction management trade contracts) is supervised by an appropriately licensed person.
Costs to fix defective or substandard work can be high. In extreme cases, fixing poor quality work has forced licensed contractors to close their business and/or declare bankruptcy. It is in a contractor's best interest to be diligent in supervision and quality control.
Anyone in the chain of responsibility, including licensees, has a duty to report a suspected NCBP or a related notifiable incident to the QBCC.
- Failure to notify the QBCC of a suspected NCBP within 2 days carries a maximum of 50 penalty units.
- Failure to notify the QBCC of a notifiable incident within 2 days carries a maximum of 100 penalty units.
If it has been established that an offence has been committed disciplinary action can be undertaken by the QBCC which may result in:
- the suspension or cancellation of a licence
- direction to pay compensation
- imposition of a monetary penalty.