A warning to unlicensed contractors and uninsured builders.
I often come across unlicensed and uninsured ‘contractors’ despite the fact that the risks of contracting without either licence or insurance can be significant.
A builder who contracts to carry out residential building work over $20,000 without insurance may encounter difficulties in obtaining payment. Moreover, financial penalties can apply for breaches of licensing and insurance requirements. Contracts that do not comply with the Home Building Act 1989 (Act) can be difficult, and costly, to enforce. But the risks do not seem to deter some contractors. In four recent prosecutions against three contractors, Fair Trading has sent a clear message to contractors who deliberately breach the Act.
Sam Robinson (aka Bassam Marouche) was first convicted in August 2016 of various breaches of the Act and the Australian Consumer Law (‘ACL‘) as a result of his efforts to contract on behalf of his construction company, ATS Group NSW Pty Ltd. The total price under three contracts approached $150,000. Neither Mr Robinson, nor ATS, held a contractor licence. The first prosecution resulted in convictions under the Act and the ACL and fines of $38,000 and compensation of $28,000. Additionally a 12-month Intensive Correction Order including community service and weekly parole reporting for offences under the Crimes Act 1900 was imposed.
Mr Robinson seemed undeterred by the first prosecution as, whilst the first prosecution was on foot, he entered into a further contract for residential building work with neither licence nor insurance. This contract was with his second construction company, BMF Building Consultants, and worth $62,000. Mr Robinson’s optimism was short lived as Fair Trading quickly launched another prosecution. The Parramatta Local Court heard Fair Trading’s second prosecution of this month and handed down a second 12 month Intensive Correction Order, a fine of $10,000 and consumer compensation of $19,000. As a result Mr Robinson is now required to provide 2 years of free service – to the community.
Minister for Better Regulation Matt Kean said:
“Robinson carried out unlicensed contracting, demanded excessive deposits, failed to provide a certificate of insurance, failed to supply materials that were paid for and, failed to finish the work,”
and that by this prosecution:
“I’m putting consumers first and want to ensure they’re protected from shonks like this who are just out to make a quick buck by hoodwinking their customers.
Robinson has until 24 November 2017 to lodge an appeal.
Fair Trading have succeeded against two other contractors in separate prosecutions in the Parramatta Local Court. An unlicensed kitchen supplier with showrooms in Willougby and Penrith and whose customers were based from Leura to Castle Hill and Oyster Bay has been fined more than $10,000 for unlicensed work. The customer alerted Fair Trading when they realised that the contractor was installing the wrong kitchen into their house.
Additionally, in September 2017, the Parramatta Local Court fined building company, T & T Sandstone Construction Pty Ltd, and its husband and wife owners the significant amount of $90,000 for contracting to carry out residential building work without a licence, for commencing work without insurance and for taking excessive deposits.
Common residential & strata building disputes
The construction of a property or the making of additions, alterations and renovations may not always go according to plan. Misunderstandings can arise, small problems can become huge issues and parties find themselves suddenly in dispute.
Residential, or home building work, refers to any work involved in the construction, alteration (or additions to), repair, renovation, extension, decoration or protective treatment of a dwelling.
Residential building work is regulated by the Home Building Act 1989 and associated regulations.
In some circumstances a homeowner (including a subsequent purchaser) may have a claim on the statutory based Home Building Compensation Fund in relation to incomplete and defective residential building work.
Disputes that arise between builders / contractors and home owners
- whether work is incomplete
- whether work is defective
- whether work is complete
- whether other structures, such as retaining walls, have suffered damage as a result of the home building work,
- progress payments
- the value of the work
- variations
- termination of the contract
- licensing and insurance.
Clare Peacock, Principal solicitor at Northern Beaches Construction Lawyers, provides practical advice on the many issues that can and do arise from residential living, building works, construction contracts, and strata living. These regulations are a complex web of statutes, by-laws, regulations, case law and know-how, and involving a number of parties and their obligations. It is important, when these issues arise, to involve a lawyer who is familiar with the specific area of law. This is where Clare can help.
Clare Peacock
Principal Solicitor
Northern Beaches Construction Lawyers