Unpaid debts could see building licences cancelled

Building contractors who fail to pay judgment debts face the possibility of having their licence suspended or cancelled under regulations enacted today.

A judgment debt is money that is accepted by a court as being owed by a licensee to another person under a contract for the supply of goods or services relating to building work.

Under the changes, a judgment debt includes an adjudication certificate issued under the Building and Construction Industry Payments Act 2004 which has been filed in the courts and a monetary decision made by QCAT which has been filed in the courts.

Housing and Public Works Minister, Bruce Flegg, said the withholding of payment without due cause had been an issue in the building industry for some years.

“If a person goes to court and gets a court order or judgment for the licensee to pay a debt, there is no legal excuse for the licensee to refuse to pay,” he said. 

“The licensee has a statutory obligation to pay the debt and if it is not paid, their licence could be suspended or cancelled under the changes I am announcing today.

“While there are instances where monies are withheld for genuine reasons such as defective work or contractual breaches, it is also evident in some instances that contractors fail to pay without reasonable and justifiable cause,” Dr Flegg said.

The changes have been made through an amendment to the Financial Requirements for Licensing (FRL) under the Queensland Building Services Authority Act 1991.

All licensed contractors are required to meet the FRL at all times to maintain an active licence. If a licensed contractor has an unsatisfied judgment debt they now run the risk of having their licence suspended or cancelled.

The new provisions in the FRL are in addition to existing provisions for judgment debts in another section of the Act, which can apply demerit points for unsatisfied judgment debts.

[ENDS]                       27 September 2012

Media Contact           Graeme Hallett            0408 763 671