HOMEOWNERS BEWARE!!
QBCC continue to make homewoners pay for their licensee's failures!
The term "underquoting" is not a specific legislative term defined within the Queensland Building and Construction Commission Act 1991 (the QBCC Act). Instead, the QBCC refers to this practice as "under-pricing" in its official guidance.
https://www.qbcc.qld.gov.au/sites/default/files/documents/guidance-statement-under-pricing.pdf
While "under-pricing" itself is not a standalone offense, the QBCC Act regulates the behaviours and consequences often associated with it through the following sections:
1. Allowances (PC and PS Items)
Schedule 1B, Section 26: For domestic building contracts, contractors must use "reasonable care and skill" when calculating Prime Cost (PC) and Provisional Sum (PS) allowances. If a contractor intentionally provides low, unrealistic allowances to win a job (a form of underquoting), they may be in breach of this section.
2. Avoidance of Contractual Obligations
Section 42E: This section prohibits the avoidance of contractual obligations that causes significant financial loss. Intentionally under-pricing a job to secure a deposit with no intent or ability to finish the work can fall under this compliance umbrella.
3. Financial Management & Insolvency
Part 3, Division 2: The QBCC monitors the financial requirements for licensing. Systematic under-pricing often leads to a failure to meet Minimum Financial Requirements (MFR), which can result in license suspension or cancellation.
Section 71: If under-pricing leads to a contractor's inability to complete a job, the Queensland Home Warranty Scheme may be triggered to compensate the consumer for loss caused by the default.
4. General Consumer Protection
Schedule 1B, Section 13: Implies statutory warranties into every domestic building contract, including that work will be carried out in an "appropriate and skillful way". Underpriced jobs often lead to shortcuts that breach these warranties.
How to Report Suspected Under-pricing
If you believe a contractor is intentionally under-pricing to win work or is operating with insufficient funds, you can file a Notification of Offence.
Gather Evidence: Collect all relevant documents, including the suspect quote, comparison quotes from other builders, and any correspondence that indicates the builder may not be able to complete the work for the price quoted.
Lodge the Form: Use the QBCC Notification of Offence form (Keep a record of all documents lodged with the QBCC) to report the misconduct. Be assured the QBCC take so long to investigate (12+ months) & it’s too late for all the other homeowners the QBCC Licensee has done this to!
Submission Methods: You can submit the form online via myQBCC, in person at a QBCC service centre, or by mail.
Time Limits: For offences under the QBCC Act, you should ideally report with 2 years BUT: you will wait 12+ months for the QBCC to investigate their NOOF and by then more of QLD Homeowners have already been caught out!!