Unlicensed builders fined $115,000 as consumer watchdogs focus on construction sector

State consumer watchdogs have welcomed combined penalties of more than $100,000 in two cases of unlicensed building operators in South Australia and New South Wales, but building sub-contractors say unlicensed practitioners are just one of many challenges facing the construction sector.

In the first case, Fair Trading NSW reports that a husband and wife in Sydney were fined a combined $90,000 after their company, T & T Sandstone Construction, entered into a contract with a consumer to build a three-bedroom home despite not being licensed to carry out this work.

The company was also found to accept excessive deposits, to have commenced work without home warranty insurance and to have not completed the work within the required time frame.

The Parramatta Local Court recorded a conviction against the husband for 10 offences relating to the Home Building Act 1989, and ordered he pay $54,000 in fines and $2878 in court costs.

In separate proceedings, his wife plead guilty to six offences relating to the Home Building Act, and one breach of Australian Consumer Law. She was fined $36,000 and ordered to pay $2538 in costs.

In the second case, a South Australian man was fined $8000 and ordered to pay more than $16,000 in compensation and $1000 in costs, after he admitted to breaching Australian Consumer Law and the Building Work Contractors Act.

In this case, the Elizabeth Magistrate’s court heard the unlicensed builder took money from two clients for paving work which was never completed, and then changed his business name to avoid detection.

Both state’s consumer watchdogs welcomed the penalties, making it clear there is zero tolerance for those in the construction space wanting to shirk their legal responsibilities.

“This is a significant penalty that should serve as a deterrent to others who would seek to take money from trusting consumers,” South Australia’s Commissioner for Consumer Affairs Dini Soulio said in a statement.

Meanwhile, the acting executive director for NSW Fair Trading’s Building and Construction service, Lynelle Collins, said the NSW case should drive home the importance of consumers doing “thorough research” into contractors to ensure they complied with licenses.

Master Builders SA chief executive Ian Markos says rogue operators have the effect of giving all good providers in the industry a bad name.

He urges consumers to research builders by using a variety of channels before engaging anyone, saying “if the price is exceptionally cheap, usually that means it is too good to be true”.

Markos advises consumers in South Australia to check the Consumer and Businesses services website for a provider’s licence status before signing on with them. Consumers in other states can check the license status of building providers through their state’s construction or business commission website.

“It is also a good idea to ask around and check social media for reviews,” he says.

Sub-contractors ‘ripped off’

The local construction sector has faced plenty of challenges over the past 12 months, including the collapse of a number of apartment builders along the east coast, which have left tens of contractors out of pocket.

Insolvency experts and economists have warned more pain is to come in the sector as some apartment markets reach a critical mass, and in the midst of the chaos, sub-contractors say that while unlicensed providers are an issue, there are bigger problems to face.

“The real problem is the licensed shonks here who rip subbies off for millions then liquidate their companies,” says John Goddard, a spokesperson for sub-contractors group Subbies United.

He says many of the providers who cause problems for smaller operators offering sub-contractor services do have building licences, but this doesn’t mean their actions don’t cause problems.

He says sub-contractors have seen cases in which a business is licensed, but it appears the business has arranged for a third party to act as a nominee with a license.

Then there are cases of construction companies being liquidated, with Goddard highlighting that 35 collapses this year have left tradies hundreds of thousands of dollars out of pocket.

SmartCompany was unable to contact the South Australian builder.

T & T Sandstone Construction was contacted but said it did not have further comment to make.

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