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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-07-16 Daily Xml
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HOME IMPROVEMENT TRADESPEOPLE

The Hon. R.P. WORTLEY (14:49): I seek leave to make a brief explanation before asking the Minister for Consumer Affairs a question about home improvements.

Leave granted.

The Hon. R.P. WORTLEY: Engaging an unlicensed or uninsured tradesperson can seem cheaper than engaging a licensed one. However, doing so can leave the customer with poorly performed work that can end up costing substantially more to rectify. Will the minister advise the council what consumers can do to protect themselves against engaging an uninsured, unlicensed and potentially dodgy tradesman?

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (14:50): I thank the honourable member for this most important question. Indeed, renovations can be very exciting projects—of course, until something goes wrong. Problems can often be avoided if consumers do their homework before renovation work begins. So far this year, renovation complaints to the Office of Consumer and Business Affairs are 25 per cent higher than complaints received this time last year, and the office is concerned that some consumers are being caught out without indemnity insurance. OCBA has received 87 complaints about home renovations so far this year compared with 65 complaints for the same period in the previous year.

While many of the complaints have been relatively minor and able to be resolved, there have been some complaints involving many thousands of dollars worth of work, and there is no indemnity insurance for some consumers to then claim against. Some consumers are pressing ahead with large scale home renovation projects without first checking that the builder has taken out indemnity insurance. This insurance can be the only lifeline for consumers if the builder goes broke, dies or does a runner during construction or during the five year warranty period.

We are hearing reports of builders going broke and not completing the work they were contracted to do, leaving the consumer out of pocket with no indemnity insurance to claim against. By law, builders must take out building indemnity insurance if the work costs $12,000 or more and council approval is required. Without indemnity insurance, consumers often have little hope of recovering their losses, especially where the builder has disappeared or become insolvent.

In other cases civil action may be an option, and I take this opportunity to remind consumers that the legislation currently only allows for progress payments for building work, so consumers should be wary of paying money before the completion of the work. In these cases indemnity insurance would not assist them. In the past 18 months, OCBA has taken enforcement action against 14 builders who failed to take out indemnity insurance, including three prosecutions. Before starting any renovations, consumers should seek at least three quotes from licensed builders, get a written quote, ensure the builder has taken out indemnity insurance where required and ask for a copy of their policy.

When undertaking renovations or improving the home, consumers should ensure that they engage a licensed trader. This work may include bricklaying, tiling, plumbing, gas fitting and electrical work. To obtain a licence or registration a successful applicant must meet specific eligibility criteria, which may include technical training; business qualifications; and reference, police and financial checks. In each case OCBA can advise on the specific criteria required. However, there are times when consumers are uncertain about whether a contractor may have a licence.

If a consumer engages an unlicensed tradesperson, there is a much greater risk, obviously, of the job being pear shaped. The work can be most unsightly, unsafe and at times unfinished. An example of the extent of dodgy work from an unlicensed tradesperson is particularly in the area of bathroom renovations. Some of the problems we have identified include substandard plumbing, installation of defective goods and projects taking considerably longer to complete.

Last year the Office of Consumer and Business Affairs undertook 18 court actions against builders, plumbers and gas fitters and electricians. Ten of these were against unlicensed operators. It is very easy for consumers to check whether a tradesperson or company has a licence, and this can be done by visiting the Office of Consumer and Business Affairs online licence register, which is on the OCBA website.

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