Watchdog cancels 96 builder licenses due to financial failures

Queensland’s building industry watchdog has canceled 96 building permits for failing to file mandatory annual financial reports.

This follows the regulator’s controversial license suspension of 2,600 contractors in December, another 400 in January and another 1,000 in March.

QBCC Commissioner Anissa Levy said the decision was made to reassure owners and industry participants that builders were working with financially viable licensees.

The CCSQ canceled the licenses after issuing several reminders over an extended period to encourage licensees to comply with their financial reporting requirements.

CCSQ licensees have been required to comply with annual financial reporting requirements since January 2019.

Levy said that while the number was high, nearly 99% of the 10,700 licensees had filed the required annual financial information by May 2022.

“Licensees in these categories have maximum allowable annual revenues ranging from $800,000 to $3 million in category one to over $240 million in category seven,” Levy said.

“Of the canceled licenses, two belonged to categories five to seven and one to category four.”

In Queensland, individuals – sole traders, partners, trustees – and companies must hold a QBCC license to carry out or contract construction work over $3,300.

Individuals and businesses must be licensed for work of any value involving drainage, plumbing, gas installation, termite management, residential building inspection, building design and services mechanical.

▲ More than half of the companies whose licenses were canceled were based in Brisbane, a quarter on the Gold Coast and a small part on the Sunshine Coast.

Many small businesses caught up in the CCQA crackdown are acting as contractors, the parties most at risk of not being paid or receiving late payments because they are at the bottom of the contractual chain.

“It’s fair and just that people get their due for their work and materials, and our reporting requirements help ensure that happens,” Levy said.

As construction costs rise at the fastest rate in more than a decade and the materials supply crisis shows no sign of easing, more contractors and contractors are likely to run into the wall.

Gold Coast builder Pivotal Homes was the latest in a series of builders forced into liquidation, following big business Condev – with debts of $33m, and Probuild – which had $5bn of projects in its pipeline. books and $311.6 million of trade-related liabilities earlier this year.

Pivotal Homes was a category three builder, licensed for low-rise work up to $30 million.

Its collapse left many potential homeowners in limbo with more than 100 homes still under construction by Pivotal and nearly 200 more awaiting council approval.

Australia’s biggest homebuilder, Metricon Homes, has repeatedly denied it is facing a meltdown amid rumors of cash flow problems and the sudden death of the company’s founder and chief executive, Marion Biasin.

Queensland home buyers are currently covered by the Home Warranty Scheme, administered by the Queensland Building and Construction Commission.

It provides $200,000 for non-completion of homes if a contract is terminated or a builder goes bankrupt.

The Queensland Master Builders Association also recently created a new construction contract to take account of rapidly rising building costs and building materials which has forced some builders into receivership.

Supply chain delays, which began during the pandemic, and massive increases in lumber and steel prices, exacerbated by Russia’s war in Ukraine, are driving up costs by 20-30%.

Industry bodies said prices for wood rose 50-100% in 2021, steel 30-60% and concrete 20-40%.

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