Most people who get building work done on their homes tend to focus on 3 key things: the quote, the timeline, and the contractor’s portfolio. Not many give a second thought to the actual legal background behind the whole arrangement, but that’s where most of the protection they’re entitled to actually comes from. In New South Wales, getting a building company Sydney to do some work on your home brings the Home Building Act 1989 into play, even if you don’t think you’re bothering to name it. Taking the time to wrap your head around what that actually means in practical terms only takes a couple of minutes, but the protection it gives can be a big safeguard.
Why the Licence Threshold Matters?
Under the Act, any contractor doing residential building work in NSW that costs more than $5,000 needs to have a valid contractor’s licence from NSW Fair Trading. And this applies to all sorts of jobs, kitchen renovations, bathroom makeovers, extensions, structural changes, even cosmetic tweaks. If you’re paying more than $5,000 for the work, then the rules about written contracts, Home Building Compensation Cover and warranty guarantees all get tied up with the fact that the contractor is properly licensed. If you go against that framework, then you suddenly find yourself without an easy way to get back at the contractor if something goes wrong.
A building company in Sydney that’s got a licence to operate has at least met the minimum requirements to be working in this industry; and for many people, that’s something that matters long before you start talking about the scope of the work or how much it’s going to cost.
What a Contractor Licence Actually Covers?
The general contractor licence grants permission to contract for and oversee the particular residential building work covered by that licence. For the electrical, plumbing, and gas work a separate specialist licence is required; a general building company cannot do these jobs under the general licence. The licence class should correspond to the scope of works and a homeowner has the right to verify it.
The status of the licence, its class, and any restrictions connected with it are available at any time for free checking in the NSW Fair Trading public register.
Home Building Compensation Cover
If the value of residential building works exceeds $20,000, a licensed contractor must purchase Home Building Compensation (HBC) Cover before getting a deposit or beginning work. This cover guarantees the compensation of the homeowner in case of bankruptcy of the contractor, his death, or abandonment of the job before the completion or rectification of the defect. In the absence of such cover, a homeowner who has paid a deposit for a failed project will have very little opportunity to recover their money.
The Certificate of HBC Cover issued for a certain job and indicating the address of the property and the scope of works is what a homeowner should get from a contractor. A general policy number will not suffice.
What to Check Before Signing?
Checking the licence number, its class, and the HBC status of the building company before signing a contract will not take more than ten minutes and will be done for free. From the NSW Fair Trading public register it is possible to find out whether the licence is active, what works it allows to do, and whether there are some disciplinary actions recorded against the licence.
Who Is Responsible When a Subcontractor Gets It Wrong?
Building companies use the services of licensed subcontractors for doing specialist jobs. According to the Home Building Act, statutory warranties flow directly from the principal contractor to the homeowner irrespective of who did the particular trade work. A faulty plumbing job carried out by a subcontractor is a warranty claim against the building company, not something that the homeowner should claim directly from the plumber.
That is why the liability flows from the licensed building company as a principal contractor. Choosing a properly licensed building company in Sydney on the basis of its record is the decision providing a clear way through any dispute.
