If you want to operate a business in the home building industry, one of the first things you need to apply for, and then maintain, is a contractor licence that authorises your business to undertake the works which it has contracted to perform. Sometimes things happen that affect your licence, which ultimately could affect your ability to trade and your livelihood.
Ensure the business entity has a licence
Where you operate your business as a sole trader, usually that person will hold an individual contractor licence in the category of work the person is qualified to perform.
If you operate your business as a partnership or company structure, it is a requirement that both the business holds a contractor licence, that reflects the business structure, and an individual within the business (nominated supervisor) holds a contractor licence or supervisor certificate. For example, if the building business is a company, there should be a contractor licence in the company’s name, and there should be an individual, like a director or employee, who is the nominated supervisor holding an authority (contractor licence or qualified supervisor certificated) in the same category of work as the business.
Only contract for works within your licence’s scope
If you hold a contractor licence, you cannot contract to perform any works that are outside the scope of that specific trade. For example, if you have a carpentry contractor licence, you cannot contract to build a house or undertake renovations where the works involved are more than carpentry services. Your licence will only allow you to engage workers or contractors performing the same scope of work authorised by your licence.
The only contractors that can engage a variety of trades are the holders of a licence in general building work (‘builder’) and other forms of ‘restricted’ builders licence like kitchen, bathroom and laundry renovation licence classes.
Performing works outside your licence class is illegal and significant penalties may apply.
Updating the nominated supervisor
A contractor licence for a company or partnership is dependent upon there being a ‘current’ nominated supervisor on the business licence record.
If a person who is a nominee for the company or partnership stops working for the business, it is imperative that a new nominated supervisor is appointed as soon as possible. It is a requirement that any departure of a nominee and appointment of a new nominee be notified to Fair Trading within 7 days. Failure to do so could result in the business licence being suspended. Unless the prior consent of Fair Trading has been obtained, the holder of a company or partnership licence who does not have a nominated supervisor for more than 30 days will have their licence cancelled.
Renew your licence on time
A contractor licence must be ‘current’ in order to enter contracts and perform the work. So ensure that you are aware of when a licence needs to be renewed, and get it renewed on time.
Fair Trading makes it clear that it is your responsibility to renew a licence on time. If you do not receive your renewal form as the expiry date nears, please contact Fair Trading or ourselves asap.
Whilst an expired licence can be restored (within 3 months otherwise it is a new application), a restoration fee will apply and it may take several weeks to be processed and become ‘current’ again. Until this occurs, you cannot trade.
Ensure licence renewal application is complete, including Continuing Professional Development (CPD) declarations
When submitting an application to renew your contractor licence or supervisor certificate, either in paper form or online, it is important to ensure all the information is accurate and that the form is filled out correctly. If there is an administrative error on an application form, for example failing to provide answers about whether you have met CPD requirements, Fair Trading can reject your application for renewal. If this happens the decision can be reviewed, but until the decision is reviewed you may not hold a valid licence, which will stop your ability to trade.
Please note that CPD applies to individuals who hold a builder or swimming pool builder licence or qualified supervisor certificate. It does not apply to the company or partnership licence.
Please make sure you renew on time and use your contractor license properly. If you would like any further information or help with contractor licenses, please do not hesitate to contact our accountants at The Quinn Group on (02) 9223 9166 or fill out an online enquiry form today.