How Building Licences Are Cancelled and Suspended in Queensland

What it is

The Queensland Building and Construction Commission (QBCC) can suspend, cancel or impose conditions on a contractor licence under Part 6 of the Queensland Building and Construction Commission Act 1991 (Qld). QBCC's disciplinary framework is one of the most active in Australia, backed by the demerit point scheme and Minimum Financial Requirements (MFR) audit program.

QCAT provides external review through its General Administrative Reviews jurisdiction.

Grounds for cancellation

Part 6 of the QBCC Act 1991 lists grounds for disciplinary action:

• serious or repeated defective work
• non-compliance with a direction to rectify under section 72
• Minimum Financial Requirement (MFR) failure under section 50E
• accumulation of demerit points reaching disqualification thresholds
• dishonest, misleading or unconscionable conduct
• criminal convictions relating to the licensed activity
• failure to maintain the Nominated Supervisor requirement under Schedule 1A
• unlicensed conduct or engaging others to do unlicensed work

QBCC treats non-compliance with direction to rectify as one of the most serious grounds because it goes directly to consumer protection.

The demerit point system

Schedule 5 of the QBCC Regulation 2018 (Qld) allocates demerit points for prescribed offences. Common examples:

• 4 demerit points: breach of Schedule 1B section 33 deposit cap
• 4 demerit points: entering a contract without cooling-off notice
• 6 demerit points: failure to comply with a direction to rectify (per direction)

Accumulating 30 demerit points in a 3-year period triggers a 3-year licence disqualification. A further 30 points within 10 years of the first disqualification results in lifetime disqualification.

Minimum Financial Requirements

Section 50E MFR framework requires licensees in higher categories to lodge annual financial reports. Non-compliance with MFR (failing to lodge, failing to meet Net Tangible Assets, exceeding revenue caps) is grounds for licence conditions, suspension or cancellation.

QBCC's MFR audit program routinely tests licensees. Failure of an MFR audit is a common trigger for disciplinary action, particularly for medium-sized builders.

Show cause notice

QBCC issues a show cause notice setting out the grounds and the proposed action. The licensee has the prescribed period (typically 21 to 28 days) to respond with evidence, submissions and any undertakings.

QBCC considers the response and issues a decision. Where the response addresses the concerns (for example, by remedying the MFR failure or accepting supervision conditions), QBCC may impose lesser sanctions.

Possible outcomes

QBCC can:

• take no action
• issue a caution or reprimand
• impose licence conditions
• suspend the licence for a specified period
• cancel the licence
• disqualify the individual from being a director or nominee
• impose penalties

QCAT review

A licensee can seek review through QCAT under the Queensland Civil and Administrative Tribunal Act 2009 (Qld). QCAT reviews the QBCC decision de novo and can affirm, vary or set aside the original decision.

Legal representation is permitted; hearings typically involve MFR expert evidence and workmanship expert evidence where relevant.

Interaction with QHWS

Where the licence is cancelled, the Queensland Home Warranty Scheme is affected. Existing certificates may be affected depending on the cancellation grounds. Consumers can claim on QHWS where the cancellation is a trigger event under the scheme conditions.

How Queensland compares

Queensland's QBCC / QCAT framework aligns with NSW Building Commission NSW / NCAT. The distinctive QLD features are the demerit point system and the MFR audit program, which give QBCC more granular tools for early intervention than most other Australian regulators.

TradeForm QLD templates flag the demerit point exposure and the MFR audit cycle as key operational risks for builders.