Last Updated Aug 8, 2018 · Written by Rob Schneider
Why hire a licensed builder when an unlicensed builder may be a cheaper option? First you have to ask why a builder doesn't have a licence. It may be because they aren't competent or don't care about the regulations regarding builders licences or insurance. A licensed builder takes their work seriously and obtains a licence because it's the right thing to do and is required in every state and territory.
In every state and territory, builders require licences. This is to protect you from unscrupulous builders who may not work to Australian standards.
These are the regulations in each state and territory:
For more information, visit Licensed Trades: Builder.
Builders licences aren't easy to come by:
These regulations are in place to make sure builders are qualified and ready to build to Australian standards.
If you don't hire a licensed builder, you may get poor quality work and the builder may take a payment, but not complete the work. Licensed builders are required to finish all work. If they don't and a complaint is lodged against them, they may not be able to renew their licence. All work must be done to Australian standards and building inspectors come regularly to check the progress of the work. A building inspector will charge a fee. To find out how to choose a building inspector and the cost, read Building Inspections: What You Need to Know.
An unlicensed builder will be working under the radar and you may not get a building inspection. They may do poor quality work and problems could arise later on. In that case, you would have no recourse but to fix the problem using a licensed builder and you could be fined for hiring an unlicensed builder. A building inspector will inspect all aspects of construction and write a report based on their findings. If something does go wrong, which is unlikely, the builder will have to fix the problem. It is unlikely because a licensed builder knows what they are doing and a building inspector is a backup who can check their work.
A licensed builder must have experience, both formal and on the job. They will have taken courses and will have built houses under supervision for a number of years. They can then apply for a builders licence and after passing a test and proving they have been in the trade for some years, they can get a builders licence. The means test is to make sure they have enough resources to carry out their work.
Builders must also carry insurance. The regulations vary from state to state, but insurance is required in all states. It will generally include public liability insurance and other insurances to provide you, the builder and their workers compensation should anything go wrong.
Insurance is required in all states and territories to protect workers, home owners and others. Public liability insurance is a must, but check your state insurance requirements to find out what a builder needs for insurance in your state.
Imagine you've hired an unlicensed builder. They probably wouldn't:
You're taking a chance when hiring an unlicensed builder. They may not be competent and problems could arise later on. If they don't carry insurance, who will pay for an accident or mishap? If you don't have a building inspection, how will you know the job has been done to Australian standards? Hiring an unlicensed builder may save you money today, but could come back to haunt you later on.
The only way to know you're getting good work is to hire a licensed builder. All the checks and balances are in place and you know you are getting a competent builder who carries insurance and is willing to have their work inspected by a building inspector. It's worth paying more for a licensed builder and you will enjoy the peace of mind that comes with knowing you've hired a trained and competent builder.