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 recent 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: http://www.qbcc.qld.gov.au/media-releases/warning-about-risks-unlicensed-building-work

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.
• Consider using a professional service provider to complete compliance checks on your behalf. Service providers such as Trades Monitor who independently verifies, maintains and keeps current records on contractors including Public Liability Insurance, Professional Indemnity Insurance, appropriate Licences, WorkCover Insurance and Safety Compliance which can save you time, cost and risk. Click here for more information.

This article was contributed by Grant Mifsud. Grant is a Partner at Archers and is responsible for overseeing some of Queensland’s largest schemes under Archers management along with other executive management duties.