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QLD Building Amendments

 Alert: Recent amendments to building licensing and regulation in Queensland 

Subcontractor liability for defective building work

With the recent release of the ‘Accountability for Subcontractor Defects Policy’ by the Queensland Building and Construction Commission (“QBCC”), the consequences of defective building work have become much more serious for subcontractors.

Previously, whilst the QBCC did have the power under the Queensland Building and Construction Commission Act 1991 (“QBCC Act”) to direct subcontractors to rectify defective work, the QBCC would typically only issue such directions and take enforcement action against principal contractors. The new policy provides that where the defective work is found to be caused by a subcontractor, the QBCC will pursue them before looking to the principal subcontractor.

The new policy takes effect from 1 June 2015.

Permitted individual applications

Under the QBCC Act, the holder of a QBCC licence will become automatically categorised as an ‘excluded individual’ if they:

  1. become bankrupt or take advantage of bankruptcy laws; or
  2. were a director, secretary or influential person of a company at the time of, or within a year after, a provisional liquidator, liquidator, administrator or controller was appointed to the company, or the company is otherwise wound up.

This would result in the licensee being disqualified from holding a QBCC licence for a period of five (5) years. A second disqualification results in a lifetime ban.

Despite what would appear to be a distinct lack of consultation with the industry considering the significant impact they will have, further amendments to the QBCC Act have now come into force that will have the effect of removing a licensee’s entitlement to apply to become a permitted individual.

Previously under the QBCC Act, the holder of a QBCC licence who became categorised as an ‘excluded individual’ could apply to the QBCC to be categorised as a ‘permitted individual’. On triggering one of the relevant events, licensees would automatically be classed as an ‘excluded individual’.

These amendments have removed a licensee’s ability to make a permitted individual application. This will have a significant impact on persons who may have previously, in their particular circumstances, been successful in applying for classification as a permitted individual and therefore been able to maintain their licence and livelihood.

Other relevant amendments include:

  1. the initial disqualification period for individual licensees has been reduced from five (5) years to three (3) years; and
  2. whilst previously any company being placed into liquidation or administration would be sufficient to trigger a ‘relevant event’, it will now be necessary for the company in question to have directly or indirectly carried out building work or building work services. This will mean that a licence holder will not be disqualified from holding a QBCC licence where a company of which they are an officeholder or influential person is placed into liquidation, administration or is otherwise wound up, and that company is not involved in the building industry.

These amendments took effect on 1 July 2015.

The information contained in this article is general in nature only and should not be relied on. You should always seek legal advice about your individual circumstances.

Key words: Commercial Litigation, Building & Construction, QBCC, Queensland Building and Construction Commission, Defective work, Excluded individuals

Posted in: Commercial Litigation News at 02 March 16