Skip to content
BuilderVet
Join free

What happens if my NSW builder is unlicensed?

By BuilderVet team. Last reviewed 2 November 2026.

If your builder needed a NSW contractor licence and didn’t hold one, they have committed an offence, they generally can’t enforce the contract against you, and your home building compensation (HBC) cover won’t respond to their work. You can also take a claim about an unlicensed contractor straight to NCAT without first going through Building Commission NSW dispute resolution.

This guide explains when a licence is needed, what the law says happens when it is missing, and the practical steps we suggest. It is general information, not legal advice. If a lot of money is at stake, talk to a lawyer.

When does a builder need a licence in NSW?

The NSW Government says a contractor licence is needed to carry out, advertise or contract for residential building work valued at more than $5,000 in labour and materials, including GST. Specialist work is different. Electrical, plumbing, drainage, gasfitting, and air conditioning and refrigeration work need a licence or certificate whatever the job costs.

The licence also has to match the work. A licence covers particular categories, such as general building, carpentry or waterproofing. The NSW Government gives the example of a subcontractor doing $3,000 of dry plastering inside a $30,000 kitchen renovation: they still need a dry plastering contractor licence. NCAT treats a licensed contractor working outside the scope of the licences they hold as an unlicensed contractor matter.

So “unlicensed” can mean three things:

  • no licence at all
  • a licence that has expired, been suspended or been cancelled
  • a licence that doesn’t cover the type of work being done

Our guide to NSW builder licence types explains categories and conditions in more detail.

What penalties apply to unlicensed work?

The NSW Government says a person can be fined $22,000 as an individual or $110,000 as a company under the Home Building Act 1989 for doing unlicensed work. Building Commission NSW also runs compliance programs to detect unlicensed contractors, and it monitors people who have been prosecuted or disqualified to make sure they don’t return to the industry.

These penalties are paid to the government. They don’t compensate you for defects or lost money.

Can an unlicensed builder make me pay?

Section 10 of the Home Building Act 1989 deals with this. In general terms, a person who contracts to do residential building work without the required licence can’t enforce that contract against the homeowner, and isn’t entitled to damages or other remedies for the homeowner’s breach of it. The builder is still liable for their own breaches.

That doesn’t always mean you pay nothing. The law around claims for the reasonable value of work already done is complex, and the outcome depends on the facts. If an unlicensed builder is demanding payment, get legal advice before you pay or refuse.

What protection do I lose?

The biggest practical loss is insurance. icare’s homeowner guidance lists work done by unlicensed builders among the things home building compensation cover does not cover. HBC is the last-resort cover when a licensed builder dies, disappears, becomes insolvent or has their licence suspended for not meeting a compensation order.

You may also have fewer regulatory options. Building Commission NSW notes that for building defect complaints, a rectification order to fix the defect can’t be made if the builder is unlicensed, although some other powers and disciplinary action may still be possible in some cases.

Protection Licensed builder Unlicensed builder
Builder can enforce contract against you Yes Generally no (HBA s10)
HBC cover for their work Yes, if required and taken out No
Building Commission NSW dispute resolution first Usually required before NCAT Not required before NCAT
Licence record you can check Yes Nothing, or a record that doesn’t match

Can I go straight to NCAT?

Yes. NCAT normally requires home building disputes to go through Building Commission NSW dispute resolution before it accepts a claim. Matters involving unlicensed contractors are one of the listed exceptions. Our guide to NCAT home building claims covers fees, evidence and how hearings run.

NCAT’s usual time limits still matter, so don’t wait while you decide.

Checklist: what to do if you suspect your builder is unlicensed

  • Search the Service NSW licence check by the person’s name, business name and the licence number on their quote or contract
  • Confirm the name on the licence exactly matches the name on your contract
  • Check the licence covers the category of work and was current on the date you signed
  • Check whether an HBC certificate was issued for jobs over $20,000
  • Stop paying further money until you understand your position
  • Keep the contract, quotes, invoices, bank records, messages and photos
  • Get an independent inspection if the work may be defective
  • Get legal advice before terminating or withholding a large amount
  • Consider an NCAT application, and report the conduct to Building Commission NSW

Our guide on how to check if a builder is licensed in NSW walks through the search step by step.

Worked example: a deck and pergola for $28,000

Priya signs a $28,000 quote for a deck and pergola. Halfway through, she notices the contract has a licence number but the Service NSW check shows that number belongs to a different person, and the business on the quote has no licence record.

Here is how we would think it through:

  1. The job is over $5,000, so a contractor licence was required. Over $20,000 means HBC cover would also normally be needed, but icare won’t cover unlicensed work.
  2. Priya pauses payments and gathers her paperwork.
  3. Because an unlicensed contractor is involved, she can apply to NCAT without first going through Building Commission NSW dispute resolution.
  4. She reports the business to Building Commission NSW so it can consider compliance action.
  5. Before refusing the next invoice outright, she gets advice on what, if anything, she may owe for work already done.

How BuilderVet helps

Run the free check on a builder’s name or licence number before you sign. We show what the public registers say so you can spot a missing or mismatched licence early. If you’re building in NSW, Build Watch keeps watching your builder for 24 months for a one-off A$79, and tells you if their record changes during the job.

Frequently asked questions

Is it illegal to do building work without a licence in NSW?

Yes, where a licence is required. Residential building work over $5,000 in labour and materials needs a contractor licence, and specialist work like electrical and plumbing always needs one. Fines can reach $22,000 for an individual or $110,000 for a company.

Do I still have to pay an unlicensed builder?

Under section 10 of the Home Building Act, an unlicensed builder generally can’t enforce the contract against you. Whether they can recover anything for work done depends on the facts, so get legal advice first.

Does home building compensation cover unlicensed builders?

No. icare lists work done by unlicensed builders as something HBC cover does not cover.

Can I take an unlicensed builder to NCAT?

Yes. Matters involving unlicensed contractors are exempt from the usual requirement to try Building Commission NSW dispute resolution first.

What if the builder is licensed but not for this type of work?

NCAT treats a licensed contractor working outside the scope of their licences as an unlicensed contractor matter. Check that the licence categories match your job.

What if the work is under $5,000?

A contractor licence isn’t needed for general residential building work at or under $5,000, but specialist work like electrical, plumbing and gasfitting always needs a licence.

Who do I report an unlicensed builder to?

Building Commission NSW handles home building complaints and runs compliance programs targeting unlicensed contractors.

Sources

Related guides

Put the records beside your quote

Search the exact business on your quote. Read the source dates and gaps before you decide.

Find your builder See a sample report

Last reviewed 2 Nov 2026