Beware the unlicensed builder

Posted on September 10, 2018

Licensed builders

A person must be licensed as a building work contractor if they want to undertake building work for a client (this includes gas fitting, plumbing and electrical work). Section 6 of the Building Work Contractors Act 1995 (SA) (Act) makes it an offence to undertake or give the impression of carrying on a business as a building work contractor if you don’t have a licence.

Not just anyone can be licensed. There are conditions to fulfil based on a builder or tradie’s qualifications and skill. Having a licence does not mean all building work can be undertaken. It is important to check a builder or tradie’s licence (including any subcontractors!).

No licence!?

Doing building work without a licence can result in:

  • a fine of up to $50,000 for an individual and for a business up to $250,000; or
  • 12 months in prison.

An unlicensed builder or tradie is not entitled to any fee or compensation in relation to the work undertaken under a contract. So it is important for builders and tradies to make sure that those yearly renewal fees are paid! A person who is looking to or has contracted a builder or tradie can check their licence on the Consumer and Business Services (CBS) website (

Who investigates this and what have they found?

The CBS is on the lookout for unlicensed builders. They receive complaints and undertake their own investigations. A number of unlicensed builders have recently been found out and fined.

Example 1

The unlicensed builder was hired by two separate owners to undertake renovations at their premises. He received a total of $25,000 in payments from the owners. After ‘completing’ the building work, both owners had to pay a further $20,000 to fix his mistakes. After complaints were made, the ‘builder’ was fined $15,000 and ordered by the Court to pay $20,000 to one of the owners.

Example 2

The unlicensed builder was operating a business that received over $66,000 in deposits from 12 clients; but he did no work for them! Another client paid him $22,000 for work that he had done but that was found to be non-compliant work. Fines to the builder and the business amounted to $70,000,. The ‘builder’ was also ordered to pay $84,960 for breaches of the Act and Australian Consumer Law. The unlicensed builder is now prohibited from managing a corporation for 8 years.

Example 3

The unlicensed building company and its director were caught out providing fake Building Indemnity Insurance Certificates to some of their clients. Insurance is required by the Act. A builder or tradie who is contracted by an owner to perform domestic building work over $12,000 has to have a building indemnity insurance policy. It provides protection for the owner if the builder stops work or the work is defective and the builder has gone broke or disappeared. This builder had a building licence but lost it for providing fake insurance certificates.

This matter is still being investigated by CBS.

Example 4

The unlicensed builder had entered into seven building contracts ranging between $33,000 and $130,000. Some of these were entered into after being warned by authorities that he was acting illegally by being unlicensed. Whilst he had undertaken works for his clients, the quality of the work was also substandard or incomplete.

The unlicensed builder was fined $175,000 by the Adelaide Magistrates Court for breaches of consumer protection laws and was ordered to pay a further $58,964.40 in compensation to four of his clients. Like Example 2 above, this unlicensed builder has been banned from managing a company for seven years.

Example 5

The builder and sole director of a company pleaded guilty to contracting outside the scope of its licence in regards to contracting for bathroom and laundry renovations while the licence only permitted wall and floor tiling.

The company’s work was considered substandard and even resulted in an encumbrance being placed on a property from the Office of Technical Regulator for non-compliant plumbing work.

The company was fined $11,840 and ordered to pay $5,500 in compensation to the company’s clients and a further $800 in prosecution costs. Chief Magistrate Mary-Louise Hribal said:

The court must make it clear that tradespeople must comply with the regulatory regime and failure to do so results in serious consequences

The message

There are serious repercussions for builders and tradies working without a licence and if they have done the wrong thing when it comes to the obligation to have insurance.

Make sure your licence is valid and up to date and that you only operate within the bounds of your licence.

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