How to check a builder is still trading

The failure mode that costs homeowners most is not an unlicensed builder. It is a licensed, competent builder whose company runs out of money part way through a contract. The licence can be perfectly current the day the administrators are appointed.

The checks, all free and public

ASIC published notices. publishednotices.asic.gov.au lists appointments of administrators and liquidators and related notices. Search the company name on your contract, not the trading name on the signage — they are frequently different entities.

ABN Lookup. abr.business.gov.au confirms the entity exists, when it was registered, whether the ABN is active and whether GST registration has been cancelled. A recently cancelled GST registration on a trading builder is worth asking about.

The licence register itself. Some regulators publish disciplinary history, conditions or cancellations against a licence. The register for each state is listed in how to check a builder's licence.

Company search. A paid ASIC extract shows current and former directors and the company's history. Worth it before a large contract, particularly to see whether the directors have been officers of companies that were wound up.

Signs worth taking seriously

Requests to pay ahead of the stage. Pressure for a larger deposit than the contract schedule. Trades on your site saying they have not been paid. Suppliers refusing to deliver. Work stopping without explanation. Any of these on their own can have an innocent explanation; together they rarely do.

When to repeat the checks

Before you sign, and again before each significant progress payment. The check takes minutes and the exposure it covers is the largest one you have. This is also the reason a progress payment should follow work that is already in place rather than precede it.

If it is already happening

There is a separate page for that, written without marketing tone and pointing mainly at regulators: what to do when your builder goes under, with the position for each state.

Why a licence check misses this entirely

Licensing and solvency are administered by different bodies for different purposes. A licence regulator asks whether someone is qualified and fit to hold a licence. It is not a financial monitor, it does not see the company's cash position, and it generally learns about an insolvency at the same time everyone else does. The two registers answer different questions and you need both.

The entity question, again

Builders commonly operate through more than one company, and directors sometimes hold interests in several. The name on the signage, the name on the licence and the name on your contract can all be different. The one that matters for insolvency is the one on your contract, because that is who owes you the obligation — check that exact entity, by ACN.

What we do

We run these checks before a builder is recommended and record the date we ran them. We also re-check. It is not a guarantee — nothing is — but a stale check is worth very little and an undated one is worth nothing.