Watchdog Cancels 96 Builders Licences Over Financial Failings

Queensland’s building industry watchdog has cancelled 96 building licences for failing to lodge mandatory annual financial reports.

It follows the controversial license suspension of 2600 contractors in December by the regulator, another 400 in January and a further 1000 in March.

QBCC commissioner Anissa Levy said the decision was made in order to reassure home owners and industry participants that builders were working with financially sustainable licensees.

QBCC cancelled the licences after issuing multiple reminders over a prolonged period to encourage the licensees to comply with their financial reporting requirements.

QBCC licensees have been required to comply with annual financial reporting requirements since January, 2019.

Levy said while the number was high, almost 99 per cent of the 10,700 licensees had lodged the required annual financial information as of May 2022.

“Licensees in these categories have annual allowable maximum revenues ranging from $800,000 to $3 million under category one to more than $240 million under category seven,” Levy said.

“Of the cancelled licences, two were from categories five to seven and one was in category four.”

In Queensland, individuals—sole traders, partners, trustees—and companies must hold a QBCC licence to carry out or contract for building work valued over $3300.

Individuals and companies must be licensed for work of any value where it involves drainage, plumbing, gas fitting, termite management, completed residential building inspection, building design and mechanical services.

▲ More than half of the businesses that had their licences cancelled were based in Brisbane, a quarter were on the Gold Coast and a small portion were based on the Sunshine Coast.

Many of the small businesses caught up in the QBCC’s crackdown act as subcontractors, the parties most at risk of not getting paid or receiving late payment because they are at the bottom of the contract chain.

“It is only fair and right that people are paid what they are owed for their labour and materials, and our reporting requirements help to ensure that this happens,” Levy said.

As construction costs grow at the fastest rate in more than a decade and the material supply crisis shows no sign of abating, more companies and subcontractors are likely to hit the wall.

Gold Coast builder Pivotal Homes was the latest in a series of builders forced into liquidation, following major firms Condev—with debts of $33 million, and Probuild—which had $5-billion worth of projects on its books and $311.6-million worth of trade-related liabilities, earlier this year.

Pivotal Homes was a category three builder, licensed for low-rise jobs up to $30 million.

Its collapse left many would-be homeowners in limbo with more than 100 houses still under construction by Pivotal and almost 200 more awaiting council approval.

Australia’s largest home builder Metricon Homes has repeatedly denied it is facing collapse amid rumours of cash flow issues and the sudden death of the company’s founder and chief executive Marion Biasin.

Queensland home buyers are currently covered by the Home Warranty Scheme, administered by the Queensland Building and Construction Commission.

It provides $200,000 for non-completion of homes if a contract is terminated or a builder goes under.

The Queensland Master Builders Association has also recently created a new building contract to take into account the rapid rise in construction costs and building materials that has forced some builders into receivership.

Supply chain delays, which started in the pandemic, and massive price increases for timber and steel, exacerbated by Russia’s war in Ukraine, are pushing costs higher.

Industry bodies said timber prices had risen 50 per cent to 100 per cent in 2021, steel by 30 per cent to 60 per cent, and concrete by 20 per cent to 40 per cent.