Australian Property News

Builders fined for lack of insurance

Posted on Tuesday, September 07 2010 at 8:40 AM

The conviction of two Illawarra builders for numerous breaches of the home building laws in New South Wales should serve as a reminder for consumers to make sure their contractors are properly insured, according to the department of Fair Trading

One builder was ordered to pay $4900 and the other $3976 in fines and costs for failing to insure work and demanding payment for uninsured work. Both pleaded guilty in separate hearings before Wollongong Court.

Fair Trading deputy commissioner Steve Griffin says NSW Fair Trading became aware of the builders’ illegal activities after receiving several complaints from consumers about defective and incomplete work.

In 2006 and 2007 the builders constructed and installed relocatable homes in Port Kembla and Dapto but they failed to provide home warranty insurance to their customers as required by law.

“Home warranty insurance is an integral part of customer protection and must be obtained by the home building contractor when the contract price is more than $12,000, before the commencement of work and before demanding or receiving any payment,” says Griffin.

The laws exist for the protection of both consumers and traders, he notes. “Any person who carries out residential building work in NSW worth more than $1000 in labour and materials must have a licence,” says Griffin.

“For specialist work, such as plumbing, electrical, air conditioning and refrigeration there is no threshold for labour and materials.”

Traders who breach the law can receive penalties of up to $22,000 for an individual or $110,000 for a partnership or corporation.