On 1 April 2009, important changes to the Home Building Act 1989 came into effect. Section 42A automatically suspends the licence of a home building contractor or a building consultant who fails to comply with an order by a court or the Consumer, Trader and Tenancy Tribunal to pay money in respect of a building claim.

Note that the new provisions do not apply when a licence holder fails to comply with any other type of order, including a work order, or rectification order.

Any suspension will remain in place until the Commissioner for Fair Trading is satisfied that the licence holder has complied with the order to pay money or the licence expires at the end of its term.

The automatic suspension provision only applies to building claims commenced after 31 March 2009.

When does suspension commence?

The automatic suspension of a licence will come into force 28 days after the date the money order was due to be paid. Where an order has been stayed pending the outcome of an appeal, the automatic suspension will not take effect until the decision is confirmed on appeal.

Generally, the due date for payment of a money order is specified in the order for payment. If no time limit is specified, the due date for payment is determined by the Commissioner for Fair Trading.

In some circumstances, the Commissioner may defer the start of a suspension. For more information, view or download a copy of the Commissioner's Guidelines for deferring the suspension of a licence under Section 42A of the Home Building Act 1989 in PDF format (size: 40k).

Consumer protection

Enhanced access to home warranty insurance

Measures have been put in place to provide greater protection for consumers in the event that the contractor they are using fails to comply with money order of the Consumer, Trader and Tenancy Tribunal or a court.

Home warranty insurance policies issued from 19 May 2009 onwards, allow consumers to lodge a claim with their insurer where the licence of their builder is suspended for failure to comply with a money order of the Tribunal or a court in favour of the consumer.