Automatic licence suspension

For non-compliance with a monetary order

Section 42A of the Home Building Act 1989 automatically suspends the licence of a contractor who fails to comply with an order by a court or the NSW Civil or Administrative Tribunal (NCAT) to pay money for a building claim.

The suspension will continue until the Commissioner for Fair Trading knows the licence holder has complied or the licence expires at the end of its term. A licence holder will be ineligible to have their licence reissued until they comply with the order of the court.

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

When does suspension commence?

The mandatory automatic suspension of a licence will come into force 28 days after the date the money order was due to be paid. Pending the outcome of an appeal, the automatic suspension will not take effect until the decision is confirmed. 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 set by the Commissioner for Fair Trading. In some circumstances, the Commissioner can defer the start of a suspension. 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 (PDF, 39.71 KB) for more information.

Consumer protection

The Home Building Compensation Scheme provides greater protection for consumers if a contractor fails to comply with a money order of the NCAT or a court. The Scheme (previously known as Home Warranty Insurance) compensates homeowners if their builder doesn’t complete building work or fix defects because of insolvency, death, disappearance or licence suspension. Go to the Home Building Compensation Scheme website for more information.