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Automatic licence suspensions 

For non-compliance with a monetary order

On 1 April 2009, important changes to the Home Building Act 1989 came into effect. Section 42A automatically suspends the licence of a contractor who fails to comply with an order by a court or the NSW Civil or Administrative Tribunal (NCAT) to pay money in respect of a building claim.

Any suspension will remain in place until the Commissioner for Fair Trading is satisfied that the licence holder has complied with the order to pay money or the licence expires at the end of its term. A licence holder will be ineligible to have their licence reissued to them until such time as they comply with the order of the court.

Note that the provisions do not apply when a licence holder fails to comply with any other type of order, including a work order, or rectification order. The automatic suspension provision only applies to building claims commenced after 31 March 2009.

When does suspension commence?

This mandatory automatic suspension of a licence will come into force 28 days after the date the money order was due to be paid. Where an order has been stayed pending the outcome of an appeal, the automatic suspension will not take effect until the decision is confirmed on appeal.

Generally, the due date for payment of a money order is specified in the order for payment. If no time limit is specified, the due date for payment is determined by the Commissioner for Fair Trading.

In some circumstances, the Commissioner may defer the start of a suspension. For more information, view or download a copy of the Commissioner's Guidelines for deferring the suspension of a licence under Section 42A of the Home Building Act 1989 in PDF format (size: 40k).

Consumer protection

Home Building Compensation Scheme

Measures are in place to provide greater protection for consumers in the event that the contractor they are using fails to comply with a money order of the NCAT or a court.

The Home Building Compensation Scheme (previously known as Home Warranty Insurance) compensates homeowners if their builder is unable to complete building work or fix defects because of insolvency, death, disappearance or licence suspension.

For more information about hte Home Building Compensation Scheme, vist

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