What is commercial builders work and do I need a builder’s license to carry out work flow as builder?

An important distinction between commercial builder work and residential builder work arises when considering the licensing (and other) requirements, as well as statutory obligations and rights of the parties. Commercial builder’s work however is not currently regulated in the same way that residential building work is, NSW. While there have been discussions at the state government level here in NSW, licensing is not a pre-requisite to carrying out commercial building work, whereas it is for residential building work. There are strict penalties that apply if a person carries out residential building work, without a license, under the Home Building Act.

Key distinguishing factors between “commercial builders work” and “residential builders work”, include, but are not limited to:

Residential builder work:

About Licensing – The builder and all builders’ contractors must be licensed.

Contract Requirements – written contract compliance with the Home Building Act must be in place before works are carried out. For works exceeding the statutory threshold, Home Owners Warranty Insurance must be obtained and in place. Statutory warranties apply to all residential building contracts. These vary between 2 to 6 years.

Commercial Building Work:

About Licensing – persons on-site are not required to licenses issued by the New South Wales Office of Fair Trading. There is no requirement for Home Owners Warranty Insurance.

There are no formal contracting requirements, but it is always suggested that a contract be entered into between the parties. The statutory warranties that are implied in residential building contracts, do not apply to commercial building works.

Of course, other legislation such as the Building and Construction Industry Security of Payment Act, Environment Planning and Assessment Act, and the Australian Consumer Law, amongst others, may still apply to commercial building works.


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