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Licence lending

February 07, 2019

Unfortunately, it is not uncommon for licensed builders and drafters to be asked to allow their name and licence number to be assigned to building work and designs that they have not completed. This practice is called licence lending. It is illegal and section 38(8) of the Occupational Licensing Act 2005 imposes a maximum fine of $31,800 for a licensed person ($63,600 for a licensed company) who permits their licence to be used by another person for entering into contracts, managing or carrying out building work, making an application for building approval, or having work authorised.

This offence does apply if you allow a person who holds an interstate licence to use your licence to get a Tasmanian approval. Licence holding is not only illegal, it is also foolish as the person who lends their licence is at risk of being blamed for problems with building work that they can never be sure is compliant, safe and acceptable to the client and future owners of the building.

HIA sometimes has members asking for assistance with proposed projects where they may be engaged to perform some building work but the owner and/or other people will do much if not most of the building work. With these proposed projects the member will be named as the builder responsible for the building work. This is also effectively licence lending – even if this is not the intent of the builder and/or the owner. A licenced builder should only be allowing themselves to be identified as the builder in a building approval if they are engaged and paid to manage and carry out the building work authorised by the building approval. To allow your builder’s licence to be used for the purpose of allowing another person to perform building work is licence lending even if you are not being paid for that purpose. Owners and unlicenced builders can also effectively get a licensed builder to lend a licence by getting a builder to agree to vary the contract to exclude work once the building approval is obtained. If you allow an owner to exclude significant building work from the contract once the building approval is issued once again you are at risk of licence lending. In this situation, before agreeing to the variation you should be consulting with the building surveyor and having the building approval amended so that the person actually responsible for the excluded building work is identified in the building approval.

If you need assistance or clarification with these matters please contact HIA Workplace Services on 1300 650 620.