Licence suspensions - information for customers

Key information

• Building Commission NSW may permanently or temporarily suspend a licence due to the trader's misconduct, non-compliance, or insolvency.
• Licence holders are not allowed to perform any building work while a suspension is in place.
• Licence holders are able to appeal suspensions and other disciplinary actions in the NSW Civil and Administrative Tribunal (NCAT).
• If your builder has their licence suspended or cancelled, this does not automatically mean you will be able to claim on the Home Building Compensation Fund (HBCF).
• You may still be liable for payments for completed residential work if it has been performed according to the contract prior to the licence suspension.

Why Building Commission NSW suspends licences

Licence suspensions can occur for a range of reasons such as:

• A licence holder becomes the subject of a winding up order under the Corporations Act,
• A licence holder fails to nominate a nominated supervisor, and
• A licence holder engages in conduct where a person or persons may suffer significant harm, loss or damage unless action is taken.

Licence suspensions can be temporary (e.g. for a period of up to 60 days) or permanent.

When applying powers to suspend a licence, Building Commission NSW considers the interests of the licence holder, current customers and the wider NSW community.

What it means for customers when the licence of their builder or contractor is suspended

Suspended licence holders will not be able to perform any residential building work while a suspension is in place.

Customers should check the terms of their contract to determine if they have any rights to organise for a replacement contractor to complete the work.

We would also recommend you consider seeking your own legal advice.

What happens to the builder or contractor while their licence is suspended?

Suspended licence holders will not be able to perform any residential building work while a suspension is in place. They are also not able to sign any new contracts with consumers.

Building Commission NSW may permit limited forms of work to occur, particularly in relation to ensuring the safety of a construction site. Any such work will need to be agreed with Building Commission NSW.

Licence suspension notices include information on who licence holders can contact at Building Commission NSW in relation to the matter.

What happens when the builder or contractor is issued with a Notice to Show Cause?

Building Commission NSW issues Notices to Show Cause (NTSC) as part of a formal process to determine what, if any, disciplinary action should be taken against a licence holder.

When issued with a NTSC the licence holder has the opportunity to review the asserted grounds for potential disciplinary action. It is their opportunity to make submissions in relation to the findings and whether any form of action should be taken.

Outcomes from a NTSC can include education, fines, licence conditions, suspension or disqualification.

If a licence is suspended or cancelled can this be appealed?

A licence holder may apply for an administrative review of a decision in the NSW Civil and Administrative Tribunal (NCAT). 

Most of the legislation administered by Building Commission NSW enables a trader who is dissatisfied with an administrative decision made by an authorised officer to request that the decision be reviewed. Details of review options will be included with the original decision.

The Reviewable Decisions Unit conducts internal reviews of regulatory decisions made by authorised officers working for Building Commission NSW, Department of Customer Service.

Reviews are conducted as per the statutory requirements of the Administrative Decisions Review Act 1997 and other relevant legislation. 

Can customers make a claim on their Home Building Compensation Fund (HBCF) policy?

A licence suspension or cancellation is not an event that automatically triggers the ability to claim on the Home Building Compensation Fund (HBCF) policy.

HBCF claims can only be made in relation to a licence suspension or cancellation if the customer seeks a money order from the NSW Civil and Administrative Tribunal or a court, and the entity fails to comply with that order.

Customers need to be aware that they may be liable for payments in relation to completed residential building work if it has been performed according to your contract. You should have received an information statement about security of payment requirements with your contract. For more information about payments in the construction industry, please see our security of payment page.