Unlicensed contracting - it's not worth it: Part 1
In this two-part series, we explore the issue of unlicensed contracting. We all know that you shouldn’t carry out unlicensed building work, but what is covered by “building work” and what are the real consequences?
In this first instalment, we dig into what is building work. We take a look at the relevant laws around unlicensed contracting and the first layer of consequences if you carry out building work without a licence.
The Legal Stuff
Section 42(1) of the Queensland Building and Construction Commission Act 1991 (‘QBCC Act’) says that:
“a person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class...”
The definition of building work is broad and although it includes the expected work of:
the erection or construction of a building;
the renovation, alteration, extension, improvement or repair of a building;
the provision of lighting, heating, ventilation, air conditioning, water supply, sewerage or drainage in connection with a building;
fire protection work;
carrying out a completed building inspection;
termite management systems for the building;
termite infestation in the building.
The definition also includes:
any site work (including the construction of retaining structures) related to work of a kind referred to above;
the preparation of plans or specifications for the performance of building work; or
contract administration carried out by a person in relation to the construction of a building designed by the person; and
carrying out site testing and classification in preparation for the erection or construction of a building on the site.
Further, contract administration includes:
preparing tender documentation and calling and selecting tenders;
preparing, or helping the person’s clients with the preparation of, contracts;
preparing additional documentation for the person’s clients or building contractors;
arranging and conducting on-site meetings and inspections;
arranging progress payments;
arranging for certificates, including certificates from a local government, to be issued;
providing advice and help to the person’s clients including during the maintenance period allowed under a contract.
Exemptions to unlicensed contracting
In some instances, you can carry out work without penalty for unlicensed contracting. These situations include:
You carried out incidental work for which you don’t hold a licence and the work was less than $3,300 in value.
You carried out the work whilst being employed and your employer has the appropriate licence for the scope of work.
You carried out the work as a subcontractor for a licensed builder or contractor who has the appropriate licence for the scope of work.
You carried out the work whilst being in partnership with someone who has the appropriate licence for the scope of work.
You have an owner-builder permit.
You have carried out design work and you are a landscape architect, you carry out the design work as part of your work as a landscape architect and the work is ordinarily carried out as a component of your work as a landscape architect.
You’re a consumer and you engage licensed contractors to carry out building work and you don’t provide any building work services yourself. For example, you may engage a licensed builder or you may enter into a construction management contract as the principal where you engage a construction manager to perform the building work services.
You’re a nominee supervisor, a site supervisor or you have a fire protection occupational licence, and you only do something permitted by those licences.
You enter into a contract to do commercial building work (ie not residential construction work or domestic building work) and the work is to be carried out by an appropriately licensed contractor, provided that you don’t cause or allow any work to be carried out by a person who is not appropriately licensed.
You submit a tender or offer to carry out building work and the building work is not residential construction work or domestic building work and it is going to be carried out by an appropriately licensed contractor.
You’re part of a special purpose vehicle and the building work is going to be carried out by an appropriately licensed contractor, provided that you don’t cause or allow any work to be carried out by a person who is not appropriately licensed.
You undertake to carry out building work (by contract, tender or offer) on a prescribed government project, the work is of a class prescribed by regulation and it is going to be carried out by appropriately licensed contractor. The exemption applies even if you directly or indirectly cause the work to be carried or you enter into a contract with an appropriately licensed contractor to do the work. You must not cause or allow any work to be carried out by a person who is not appropriately licensed.
Please note however, that none of these exemptions are available if you carry out fire protection work without the appropriate licence.
What is it going to cost you?
If a person is found by the Queensland Building and Construction Commission to have carried out, or undertaken to carry out, building work without the appropriate licence, there are serious consequences.
Unlicensed contracting attracts serious fines:
For a first offence: up to $33,362.50.
For a second offence: up to $40,035.
For a third or later offence: up to $46,707.50 or one year’s imprisonment.
However, the consequences don’t end there.
But wait there’s more…
In the next instalment, we will deal with the “other” costs of unlicensed building.
In the mean time, if you would like to get in contact with us regarding building and construction work, please contact us on 07 3128 0120 or email email@example.com.
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