Queensland’s builder licensing system is like no other in Australia.
It extends to a broad range of construction industry participants and projects and it is heavily regulated.
There are significant penalties and financial implications for not having the required licence.
If you are starting construction work in Queensland, or if you are an established participant in the industry in Queensland, it is important to understand the requirements for licensing and ensure you have the right licence, as non-compliance can have serious implications for your business.
In this article we outline:
- when a licence is required;
- the consequences of not holding the correct licence; and
- some exceptions to the requirement to hold a licence.
WHEN IS A LICENCE REQUIRED?
In Queensland, the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) imposes strict requirements for licensing for individuals and companies which are carrying out, or undertaking to carry out, ‘building work’.
Under the QBCC Act, 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 under the QBCC Act.
The terms ‘carry out’ and ‘undertake to carry out’ are further defined in the QBCC Act, to give the requirements for licensing broader effect:
- “carry out”, for building work, means: carry out the work personally, directly or indirectly cause the work to be carried out, provide building work services for the work.
- “building work services” is defined to include: administration services, advisory services, management services, supervisory services.
- “undertake to carry out”, for building work, means: enter into a contract to carry out the work, submit a tender to carry out the work, make an offer to carry out the building work.”
These definitions extend the application of the licensing regime, to the performance of services and tasks beyond what is traditionally considered to be building work.
The QBCC Act does not regulate some construction industry participants including engineers, architects and persons performing electrical work, which are governed by separate legislation.
WHAT IS “BUILDING WORK”?
The term “building work” is broadly defined and includes:
- 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;
- 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;
- contract administration carried out by a person in relation to the construction of a building designed by the person; and
- carrying out a completed building inspection.
The term “building” is also broadly defined as including “any fixed structure”, which may include for example, a fence, or an in-ground swimming pool.
Consequently, what is considered to be within the scope of “building work” for the purposes of the QBCC Act is extensive.
WHAT DOES NOT CONSTITUTE BUILDING WORK?
Certain work is not “building work” for the purpose of the QBCC Act.
- construction, maintenance or repair of a public road or tunnel for a road, public bikeway or footpath or a tunnel for a public bikeway or footpath;
- construction, maintenance or repair of a public bridge;
- erection of scaffolding;
- construction work in mining;
- works for curtains, blinds and internal window shutters, laying carpets, floating floors or vinyl;
- work consisting of earthmoving and excavating; and
- laying of asphalt or bitumen.
As this work is not “building work”, it is not subject to the licensing regime.
WHAT ARE THE CONSEQUENCES OF CARRYING OUT BUILDING WORK WITHOUT A LICENCE?
The consequences of performing building work without the required licence under the QBCC Act include penalty provisions and limitations on payment recovery.
Carrying out unlicensed building work is an offence under the QBCC Act and carries the following fines:
- $34,462.50 for the first contravention;
- $41,355.00 for the second contravention; and
- $48,247.50 or 1 year’s imprisonment for the third and subsequent contraventions.
LIMITED RECOVERY RIGHTS
A person who carries out building work in contravention of the QBCC Act is not entitled to any monetary or other consideration for doing so, except for reasonable remuneration for materials and labour.
The person cannot recover any amount for their own labour or profit and for any materials and labour which were not reasonably incurred.
In addition, a person who carries out building work without the required licence will be unable to take advantage of the statutory rights to payment and adjudication process under the Building Industry Fairness (Security of Payment) Act 2017 (Qld).
EXCEPTIONS TO BUILDING WITHOUT A LICENCE?
There are limited exceptions to the requirement to obtain a licence, despite doing “building work” of some kind.
For example, you do not need a licence to do building work if you are:
- an employee whose employer holds the appropriate licence class (excluding fire protection work or mechanical services work);
- an entity who performs the work in partnership with another entity who is licensed;
- performing work on prescribed government projects.
A further exception is the “head contractor” exception, which allows an unlicensed person to enter into a contract to carry out building work if the building work is to be carried out by an appropriately licensed contractor.
The “head contractor” exclusion is set to be removed from the QBCC Act through recent amendments passed by Parliament. The repeal of the provision was set to take effect on 24 July 2021. However, the Government has announced that the repeal has been deferred until late July 2022.
Any person intending to rely on this exception to holding a licence will need to carefully consider any changes to the legislation.
UNSURE IF YOU SHOULD HAVE A LICENCE?
The builder licensing regime in Queensland is broad in its application and has severe consequences for persons who do not comply.
Construction industry participants who are starting business in Queensland need to understand the requirements for licensing and ensure that the required licences are in place before commencing any work which may fall within the broad scope of “building work”.
Businesses already operating in Queensland should also ensure that they hold the correct licences for the scope of work which they perform, to avoid the imposition of penalties and limitations on payment which result from having the incorrect licence.
Need help understanding your obligations or the licensing process? Get in touch here.