We are fortunate to have high standards required for selecting a reliable contractor in Queensland. The building industry is tightly regulated and licensed with the requirement that the different classes of builder must have proper training, experience, real resources and actual assets to carry out your project and to secure the value of the work.
Queensland Home Warranty
Builders really do put their own assets on the line each time they build for you because of a compulsory home warranty scheme administered by the Queensland Building and Construction Commission (QBCC). This scheme provides that if a claim is made under the home warranty scheme to repair defective or incomplete work, the building contractor must reimburse the QBCC.
Contractors don’t even have the option of hiding behind the insolvency laws. As a result of a spate of “phoenix companies” a few years ago, any builder or contractor who makes use of the bankruptcy or insolvency laws automatically loses his or her building license.
While the days of the cowboys, bullies and fly-by-night-artists seem to be behind us, there are always one of two individuals who would cut corners, if given a chance. The value of building projects is now so great that it attracts a variety of characters, some quite forceful and not all of whom are ultimately able to properly manage any changes in what quickly becomes multimillion dollar projects.
We have seen recently how there has been a spate of building contractors going into insolvency, often for supply reasons beyond their control. For these individuals it really is the end of the road as a builder. Some of them would have had no alternative except to face personal liability and even potential criminal action. All the usual corporate rules also apply to builders and for many the turnover is too high to be able to seek safe harbour provisions that might have allowed some form of compromise. Instead, those builders face losing their personal assets and the loss of their careers with little likelihood of recovery in the industry.
Things to Consider When Choosing a Builder or Tradesperson
Sadly, for each of those builders that do go into liquidation, many customers are left out of pocket. You don’t want to end up in the position of being a concurrent creditor with a half-built project that no contractor wants to touch let alone find any certifier to take responsibility for approving the work. So, when it comes to your building project, there are a few common-sense steps that you can take to try to protect your own position before you engage building contractors or sign any contract for construction work, set out as follows.
Use a Licensed Contractor with a Current QBCC Licence
Complete a Search to Check the Contractor Holds a QBCC Licence
This is a free search of the QBCC website which will show you the licensing history of the contractor and list any demerit points or fines previously levied against the builder. Reading the history can tell you a lot. Why would you engage a building contractor who might have no recorded demerits but who, for example, has failed to renew his or her license because he or she is financially unable to do so? Ask yourself, how well will such a builder manage the complex financial requirements of your project?
Contractor’s must be licensed to engage in residential construction work. if you cannot find a licence number you might want to contact the QBCC directly and find out if you are dealing with a genuine contractor or an unlicensed scammer. Only if the quote for your domestic home building project is under $3000 can a tradesperson offer to do the work without a proper licence.
Check for Historical Records Through the Courts
Start by searching the Queensland Commercial and Administrative Tribunal (QCAT) building decisions on the Supreme Court library website. Look for the name of your builder or contractor and be concerned if there are multiple entries showing a potential propensity towards litigation. You want to spend your money on your building project, not on Lawyers.
You should carry out a search of the Brisbane supreme and District Court eCourts website. A search of the contractor’s or builder’s business and individual names will show who has a propensity for litigation. Once again, why would you use a builder or contractor who is unable or unwilling to compromise without court intervention.
Similarly, it may be worth carrying out a search of the QBCC adjudication decisions website. Adjudication is an interim dispute resolution process, so the list allows you to see which builders or contractors are constantly fighting about payment. Although it does not apply to domestic building contracts, it is still useful in such projects because subcontractors will make use of the adjudication process to recover unpaid funds from contractors. Suppliers also show up here if the contractor is not paying for materials that have been supplied. If your contractor is having to fight for funds, or is withholding payment, do you really want to engage that individual?
Check that the Builders Work is Valued by Prior Customers
As always, word-of-mouth is probably the best form of advertising. The glossy brochures, fancy websites and social media commentary may be purchased so are probably not reliable as an indicator of quality or resources, but if you can use the commentary to get to individuals who genuinely contracted with the builder, you might be able to actually see the type of work the builder or contractor really does do. Keep in mind that there are always one or two customers who will never be satisfied but whose criticism might indicate that the surrounding commentary could be genuine.
Check that the Proper Documentation is Used When Signing a Contract
An important red flag warning against a builder or contractor is one who does not have proper documentation. It is a statutory requirement that domestic building work not start before a proper building contract has been signed. The requirements are set out at schedule 2B the Queensland Building and Construction Commission Act (QBCC Act). If a builder or contractor wants to carry out work on nothing more than a quotation, be wary because that builder might not have the resources to do the job properly. The need for terms and condition in a proper contract is even more important in commercial work. Keep in mind nobody needs to look at the contract when everything goes well desperately need to know what to do when things do not go to plan. You need to be able to terms detailing, for example, the total price, who does the design, how long it should take, who pays for delays, how to vary the contract and how to serve a defect or default notice. You are entitled to workmanship to Australian Standards. Building work is complicated and a major financial commitment so you should obtain independent legal advice before you commit.
Communicating with the Contractor
Strangely enough, you want your builder or contractor to come to you during the project with written requests for variation orders and extensions of time. If that happens, work with the builder or contractor and be reasonable. If you are unsure of the veracity of the claims, you should get another builder or contractor to give you an opinion, or even ask the QBCC. The are a myriad of reasons why a contract might need to be changed slightly or take longer than expected. What you don’t want from builder to be ambushed at the end of the build when it is taken weeks or months longer than originally anticipated and you are suddenly presented with a significant invoice for all sorts of additional work.
Know the Steps Required in the Event of a Dispute
Finally, ask yourself what you will do if the end result is not what you expected. The QBCC has a well-used dispute resolution process that is free for you to use. It can involve QBCC inspectors visiting your site to assess the work that has been carried out. The process is required if you are to make a claim under the home warranty insurance or if you need to take the matter further, for a decision by the specialised building division of QCAT.
Peace of Mind When You Build a Home
By following the steps above you will be able to progress on your construction journey with confidence. Our experienced team at Michael O’Brien Lawyers is dedicated to providing you with comprehensive legal support in building and construction. From contract reviews to efficient dispute resolution, we’ve got you covered. Ensure peace of mind as you build your dream home – Contact us today or Call (07) 3488 0698; for expert guidance and personalised attention. Your peace of mind in the construction process begins here.
