The Queensland Building and Construction Commission’s (QBCC) new ‘Accountability for Subcontractor Defects Policy’ will take effect from 1 June 2015. The purpose of the new policy is to ensure that subcontractors are held accountable for any defective building work they have completed.

Senior Associate Jason de Lacy and Partner Ren Niemann review this new policy and its implications.

The policy

The QBCC already has the broad powers to direct subcontractors to rectify defective work.  However, under the existing policy, principal contractors have generally been held responsible for ensuring that defective work completed under their supervision is adequately rectified.

Under the QBCC’s new ‘Accountability for Subcontractor Defects Policy’, the subcontractor responsible for the defective work must, if issued a direction to rectify by the QBCC, rectify the defect or face disciplinary action which could result in suspension and/or cancellation of their licence.

The QBCC will only issue a direction to rectify defective work where the subcontractor responsible for the work is unwilling to fix the defect.

If a subcontractor fails to comply with the QBCC’s direction to rectify, the principal contractor will be required to rectify the defect or have another subcontractor rectify it, at the principal contractor’s cost.  The QBCC would then take disciplinary action against the subcontractor.

The process

A contractor or consumer can make a complaint to the QBCC in respect to defective building work.  As part of its assessment of the complaint, the QBCC will attend the site to inspect the building work and determine if it requires rectification.

If the QBCC determines that a subcontractor is responsible for defective work, and issues the subcontractor (and the principal contractor) a direction to rectify, the following process occurs:

  • if the subcontractor agrees to rectify the defective work, the QBCC will monitor the rectification work to ensure that it is adequately performed, or
  • if the subcontractor does not rectify the defective work, and the principal contractor agrees with the QBCC that a defect exists, the principal contractor must rectify the defective work.

A direction to rectify defective work will not appear on the subcontractor’s and/or principal contractor’s public record if they comply with the direction.

The practical implications

A subcontractor that fails to comply with a direction to rectify risks the possible suspension or cancellation of its licence by the QBCC.

Where a subcontractor does not comply with direction to rectify defective work, the principal contractor will have to take action against the subcontractor in order to recover its costs rectifying the defective work.