A recent conviction at the Brisbane Magistrate’s Court has been a wake up call to all Bodies Corporate of the risks they face when engaging an unlicensed contractor. A Brisbane building company was found guilty of three offences under the Queensland Building and Construction Commission Act 1991 and the court imposed significant penalties including a recorded conviction for unlicensed building work. This article outlines the consequences for Bodies Corporate and Body Corporate Managers when engaging unlicensed contractors.

If a Body Corporate employs unlicensed tradespeople in Queensland to carry out work that requires a license, they could be found in breach of their legal and ethical obligations. They could also face legal and financial consequences. Queensland legislation requires that Body Corporate Committees act in the best interests of the owners that they are representing. Also, that they exercise due care and diligence in the performance of their duties. This includes ensuring that only licensed and qualified tradespeople are engaged to carry out work that requires a license. 

Under section 51B of the Queensland Building and Construction Commission Act 1991, it is an offense for a licensed contractor to contract with an unlicensed person to carry out building work. Similarly, under the Electrical Safety Act 2002, unlicensed electrical work is illegal, and penalties can include fines of up to $40,035 for individuals and $200,175 for corporations. Hence, fines for a Body Corporate contracting unlicensed electricians can be just as much or even more. Under the Queensland Government, property industry breaches and penalties can have large fines or may result in imprisonment. 

Below are two examples of what can go wrong when organising contractors to undertake work onsite. This recent case highlights the importance of ensuring your contractor is not only licenced but follows safe work methods. 

Example 1

A committee member engaged a contractor to commence repairs on pathways around their body corporate scheme. They engaged his services prior to the Body Corporate Management Company having time to check the contractors licencing and work methods. The poor precautionary measures taken by the contractor resulted in an elderly resident falling and being hospitalised with a broken hip. She subsequently died 10 days later without leaving the hospital. 

As this was the first time, he had been found liable, the courts findings resulted in the contractor receiving a 5-year suspended sentence plus a huge fine. However, it doesn’t end there, as he is facing a civil suit from the grieving family that lost their one and only mother/grandmother through the fault of careless and reckless safety planning and site preparation. Furthermore, the entity (the Body Corporate) that employed the contractor may also be requested for compensation and this may result in further action being taken against the Committee member and the Body Corporate. 

Example 2

A Brisbane contractor recently photoshopped is ID and submitted it to Solution in Engineering’s ARM Contractor Compliance division. The contractor was claiming to be suitably licenced and insured however, the compliance team found some anomalies and informed the QBCC. The contractor had been suspended and had four work violations outstanding that he is yet to be exonerated from. Imagine if he had been allowed to work on the Body Corporate case where the elderly lady lost her life. The Body Corporate would be completely exposed and their insurance in tatters. 

Managing your risks when you engage contractors

When you engage a contractor to perform work on a property, you take a risk – a big one. You are trusting they are properly qualified, licensed, and insured and that they will complete their work in a safe and professional manner. The enormity of this engagement risk only becomes apparent when something goes wrong. Here’s some simple tips for staying out of trouble:

If you hire contractors who do not have the proper qualifications and licensing to carry out the work they’ve been engaged to do, you take on not only the risk of the work not being completed professionally but also risk that they are not covered under either the QBCC (Qld Building and Construction Commission) insurance scheme or their own insurance (if they have any!).

Work that is not carried out by a qualified contractor can have legal implications – including voiding the warranty of products which have been installed as well as voiding of insurance policies. If there is an accident the responsibility for not engaging a professional will fall on you as the person that instructed/engaged the contractor.

It is simply good practice to ensure that the contractors you invite onto your property to conduct work are fully compliant with all legislative and all reasonable risk mitigation strategies. Cleaning up after an incident is a mess.

To help you here is your Contractor Compliance Check List…

To assist you with checking contractors for compliance and safety, please use the following check list:

Check the scope of work the trades person is providing and check if more than one type of trade/work is involved.

1. Check the trades person is licensed by visiting https://www.qbcc.qld.gov.au
2. Ensure their license is appropriate for the ALL areas of work they are providing.
3. Ask for a Certificates of Currency for insurance for Public Liability and Professional Indemnity.
4. Ask for proof of WHS systems, or at the very minimum, ensure you obtain their signature on the Safe Working Agreement
5. document provided in the Safety Report for the Owners Corporation.
6. Check the ABN number for the contractor and/or entity is correct and the name on the quote and resulting invoice matched the ABN
7. registration. Also ensure that you are not being charged GST if they are not registered for GST.
8. Keep the expiry/renewal dates on file and put in place a reminder system to ask for the new license/insurance/WHS system details
9. as they are renewed. This ongoing check is vital to the integrity of your risk management approach.

Before seeking quotes write up a scope of works and insist that each contractor’s quote is based in that scope. This will result in like for like, apples for apples quotes. Easier for committee members to choose the best value quote that ticks all the boxes. 

As part of the scope the contractors have to provide a copy of the relevant licence/s and insurances that allows them to professionally undertake the task. Also, make sure there’s plenty of time before their documents expire so that the job can be completed. Finally request that they submit a signed Safe Work Method Statement. If you have any queries, we’re here to help just contact us on 1300 136 036 or [email protected]