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The risks of choosing unregistered contractors

If you are considering building or trade work on your strata property and investigating contractors, you may find it appealing to take a chance on a contractor who supposedly does great work even though he’s not licensed, because he’s offering a deal that sounds almost too good to be true. Unless you are a construction professional, how are you to know whether or not that contractor is following building regulations?

While a licence may not be a guarantee that a contractor is going to do a professional job, it does mean that he is appropriately skilled and qualified to carry out the building or trade work required. Licensed contractors must also carry public liability and professional indemnity insurance, in case of damages caused during the course of the project.

A warning issued by the Queensland Building and Constructions Commission (QBCC) reports that four companies were collectively fined more than $40,000 for unlicensed building work services and other offences:

Cleaning up the mess left by an unlicensed contractor can leave you with a hefty bill. No matter how small a job is, you could end up paying double to fix the mistakes, and any damage that may not be covered by your insurance. When the risks of a cost-cutting measure outweigh the benefits, it is not worth taking it.

To ensure your property is protected when hiring a contractor, follow these five simple rules:
• Check if the contractor is a registered business. This can easily be established by looking up and cross checking the contractor’s Australian Business Number (ABN). This is especially important when a contractor is claiming GST for work they are performing.
• Ensure your contractor has appropriate licences and experience in Strata renovations. They will need to follow the by-laws and any Council regulations on noise pollution, to ensure complaints and potential on the spot fines are not received. Most local Councils provides useful advice on noise pollution and building work on their websites.
• In addition to the required licences, contractors should also have up-to-date public liability, professional indemnity and other types of insurance as a condition of completing work in their industry. These policies should also include cover for any workers they employ.
• If you’re employing a contractor that does not require a licence, check that they are a member of their industry’s professional or peak body. This will demonstrate the contractor’s willingness to conform to industry standards.
• Depending on the type of work, a contractor should also be able to provide a Safe Work Method Statement (SWMS) to ensure they are committed to completing the work safely and with minimal risk.

This article was contributed by Grant Mifsud. Partner – Archers the Strata Professionals.

Leave a Reply

  1. Jasmine Barillaro

    Hi Grant,

    Ducted air conditioning is in my home. Who is responsible for maintaining the air con, when the unit is situated inside my courtyard and the contractor needs to go into the roof to service the ducting?

    Regulation Module – Accommodation

    1. Archers the Strata Professionals Listing Owner

      Dear Jasmine,
      Whilst your question lies outside of the scope of the topic of this Strata Update, the issue you raise is a reasonably common query, and indeed the issue of air-conditioner ducting in ceiling voids has recently been the subject of Adjudication in the matter of The Body Corporate for Chateau Bohemia, Appl. No. 1222-2017, Order dated 19 March 2018.
      The short answer to your question is that the Lot Owner is responsible for the air-conditioner system unless the air-conditioner system has a central chiller plant that ducts cold air throughout the entire complex. It would appear that in your scenario the air-conditioner system is your responsibility.
      The basic rule is that you are responsible for any infrastructure that services your unit only. Conditions such as ‘who bears the responsibility to maintain the system’ should have been stipulated at the point when Committee approval to install the air-conditioner was given.
      Regarding the issue of the ducting traversing the ceiling void, which is Common Property, that does not change the position as to whom is responsible for the maintenance of the system. In the Adjudicated matter of The Body Corporate for Chateau Bohemia, the Adjudicator found that there is an implied statutory easement across Common Property for the purposes of installing ‘utility services’ and that the Owner has the right to use and occupy that space for those purposes.
      We trust that this reply satisfies your enquiry.

  2. Eli Richardson

    I’m glad you talked about the importance of checking a contractor’s license when hiring one. Recently, my wife and I decided we want to add another room to our home. We have a baby on the way, and we want to start as soon as possible, so we’ll be sure to follow your advice! Thanks for the tips on looking for a licensed contractor for any renovation project.