Unlicensed Contracting – Part 3 – The Solution
Unlicensed contracting is an offence that can result in not getting paid for the work provided. Even the security payment under the Building Industry Fairness Act 2017 (BIF Act) will not apply to jobs that were carried out without a licence. Besides, offenders will suffer paying costly fines.
In this article, we will discuss some plausible solutions to unlicensed contracting. As the monetary penalty is one of the significant consequences, we will also look if overcoming fines from unlicensed contracting is possible. Arming yourself with vital information is an essential step in ensuring you won’t run into problems at any critical phase of your project.
Solutions and Other Work Arounds
The QBCC Act imposes a stringent and specific fine for those who fail to follow this law. Not only will offenders have to pay fines and other monetary costs, but they may also even face imprisonment depending on the magnitude of the offence.
The question is: How do we prevent this enormous inconvenience from happening in the first place? Fortunately, we’ve compiled below some helpful tips for you:
- There are online tools that can help you verify whether the contractor you are dealing with is duly licensed or not.
- While Section 3 of the QBCC Act states that the offender is not entitled to any monetary and other consideration, Section 42(4) may make it possible to claim payment for the cost of materials and labour. This statutory entitlement is applicable under the following limitations:
- The amount being claimed will not exceed “the amount paid by the person in supplying materials and labour for carrying out the building work”; and
- The amount being claimed “does not include allowance for the person’s own labour supplied, profits, cost of supplying the materials and labour, the cost of the building work, and other amounts paid for the person’s direct or indirect benefit”.
- Carefully review the construction contract and study the scope of work meticulously. Analyse the licensing requirements for the scope of works. Before you sign it, make sure that you are licensed to do the job stipulated in the contract. This is a sure-fire way of preventing problems brought about by unlicensed contracting.
- Get the necessary licence if you find that you often get contracts that involve works falling into another licence class, which you do not happen to have. It is certainly the best solution to unlicensed contracting problems. The effort to obtain the licence will be extremely beneficial to you.
- Get help. If you are unsure how much scope of work your licence covers, talk to a construction lawyer. When you are certain that you cannot carry out a work you are not licensed to perform, ask the head contactor to consider hiring separate trades with a licence for that specific work scope. Always remember that it is better to err on the side of caution than to deal with the consequences of a huge and costly mistake.
Monetary Penalty and Payment Options
Once you receive the Infringement Notice, you have 28 days to pay the fine. The State Penalties Enforcement Registry (SPER) will be working with you throughout your payment process. Here are some payment options you may apply for if you can’t pay the full amount within 28 days:
- Pay Later
Under some circumstances, they allow a Pay Later plan. New payment date will be sent to you by mail. The new date will be determined by many factors, including the complexities of your review request and how much time is remaining.
- Instalment Plan
In case you cannot make full payment on or before the due date, you have the choice for an instalment plan. SPER usually allow part payments for fines costing $200 or more. You must send them a prior notice that you would like to pay in instalments. They ask a minimum fee of $60 as initial payment. You can apply for SPER’s instalment option online if you are qualified for this payment option.
Can I Dodge the Fines?
As you may have already known, the QBCC Act enforces strict penalties for those who fail to follow their regulation. One common question regarding this is whether overcoming fines from unlicensed contracting can be possible. In a nutshell, it is; to do that, you must file a petition by contacting the QBCC investigating officer assigned in your case. You must clearly state your reason or evidence why the fine imposed upon you is improper.
Be informed that they do not accept ignorance of the law, financial hardship, and leniency request as reasons for failure to comply with the regulation. As QBCC is quite firm about the regulation, they usually reject appeals. When this happens, you can choose to take your case to the Magistrates Court. Again, be warned that if the court concludes you guilty, you will most likely pay much more than the original fine.
What If I Didn’t Pay?
Not paying would the most ninja attempt at overcoming fines from unlicensed contracting. Ignoring your Infringement Notice has its dire consequences.
First, your new licence application will get rejected. As for the existing licences, they can be suspended or cancelled. Second, it will blemish your public record as the offences and demerit points get displayed on the Online Licence Search for years. Third, enforcement actions may be taken against you. You could be prosecuted in a Magistrates Court, resulting in even higher fines and imprisonment.
A Tricky Regulation to Traverse
The items above outline the prevention and solutions to unlicensed contracting. It is critical that contractors carefully evaluate any proposed work before they commit to a contract. It would make for a smoother job flow, wouldn’t it? Unfortunately, this is not as simple as it may seem.
The excluded work indicated in Schedule 1AA of the QBCC Act can be confusing and tricky. In the listed exclusions, there are also exceptions. For example, a specific work may be an exception to an excluded building work, and therefore constitute building work, hence requiring an applicable class of licence.
We strongly advise that you seek help regarding unlicensed contracting problems. Getting professional advice is a fool-proof way to avoiding massive headaches and pain in your pocket. Think twice about treading this tricky path on your own. Remember that it is not just the money at stake here, but also your name and reputation as a contractor. So, contact us on 1300 656 498 for more info and help you get qualified!