In brief – More exclusions to prohibition against performing unlicensed building work

Building licences are no longer required for commercial property developers, for preparing tenders or for public-private partnerships or government projects following the commencement of the Queensland Building and Construction Commission Act 1991.

Government releases action plan following inquiry

In May 2013 the Queensland government released a "Ten Point Action Plan" for the reform of the Queensland Building Services Authority in response to recommendations made by a 2012 government inquiry.

The first part of that action plan has now been implemented with the new Queensland Building and Construction Commission Act 1991 (QBCC Act) replacing the Queensland Building Services Authority Act 1991 (QBSA Act) as of 1 December 2013.

Queensland Building and Construction Commission replaces Queensland Building Services Authority

As of 1 December 2013 the Queensland Building and Construction Commission (QBCC) replaced the Queensland Building Services Authority (QBSA) as the regulatory body for the building and construction industry in Queensland.

The QBCC has the same functions as the QBSA, but its governance is now controlled by the board which provides directions to a commissioner who replaces the former general manager.

Exceptions to general prohibition against unlicensed building work broadened

The QBCC Act prescribes additional exceptions to section 42 of the QBCC Act, which prohibits a person from carrying out, or undertaking to carry out, building work unless that person holds a contractor’s licence of the appropriate class.

Prior to the 1 December 2013 amendments, section 42 meant that a wide range of people were required to hold licences, including property developers and entities wishing to submit tenders on projects, even if they did not intend to carry out any building work of their own.

Anyone who breaches section 42 of the Act is not entitled to make a profit from the work, and is only entitled to recover its own reasonable costs of the cost of supplying materials and labour for the work (but not the person’s own labour).

Unlicensed contractors also do not have any rights under the Building and Construction Industry Payments Act 2004 and can face significant fines.

Commercial property developers no longer required to hold building licence

Under the new QBCC Act, an unlicensed person may enter into a head contract to carry out commercial building work, provided the work is to be carried out by an appropriately licensed contractor.

The exclusion relieves commercial property developers of the requirement to hold a building licence where they will be engaging a licensed contractor or contractors to carry out the work.

There is, however, a positive obligation on the unlicensed person to ensure that no work is carried out by anyone without an appropriate licence.

Contract managers will still need to be licensed, as contract management services are deemed to be building work under the QBCC Act. The new exclusion therefore does not allow unlicensed entities to administer or manage contracts or to supervise building work.

The exclusion also does not apply to residential building work.

Building licence not required for preparing tenders

The amendments also state that a licence is not required for preparing tenders or offering to carry out commercial building work.

This will allow interstate contractors and other unlicensed entities to tender on Queensland projects before obtaining a licence under the QBCC Act, and will therefore reduce barriers of entry into the industry.

Again, this exception does not apply to residential building work.

Exclusion for public-private partnerships and government projects

The QBCC Act also prescribes new licensing exceptions for work carried out under public-private partnerships and on certain prescribed government projects.

Exclusions do not alter strict licensing requirements to carry out building work

While the amendments may provide some relief for property developers, unlicensed entities wishing to tender on projects and for certain government projects, strict licensing requirements remain and the consequences of carrying out (or undertaking to carry out) unlicensed work remain severe.

Care should be taken before entering into contracts to ensure that appropriate licences are held.