The Home Building Act 1989 governs residential building work in NSW. A person doing residential building work must be licenced by the Department of Fair Trading, unless the cost of labour and materials is $5,000 or less.
A person doing residential building work, repairs, renovations or advertising must be licenced if:
• the total cost of labour and materials are more than $5,000;
• it is electrical wiring work;
• it is plumbing, draining and gas fitting work; or
• it is air conditioning and refrigeration work (except plug-in appliances).
Licensing helps stamp out illegitimate operators and creates a level playing field for all tradespeople. Licenced tradespersons have to pay annual fees and insurance premiums.
If the work is more than $20,000, the tradesperson is required to submit a written contract to the residential owner and provide for a cooling off period. In some instances for small jobs a much less onerous written contract is required for jobs over $5,000.
Owner builders require a permit from the Department of Fair Trading (with insurance) for residential building work with labour and material costs of more than $10,000, or you are required to get Council development consent for such work.
Large fines apply to first offenders and gaol is an option for second time offenders, who are unlicenced and/or uninsured.
In addition to criminal penalties, unlicensed tradesmen might even find they don’t get paid for the job done, are sued for recovery of monies paid or might have orders made by NCAT against them.
All home owners should be aware that they can demand evidence of licence and insurance from tradespeople. If you have any more queries please feel free to contact us.