Most homeowners know they should check whether a builder is licensed. But far fewer realise there's a second - equally important - question: is the builder licensed to do this specific type of work?
In NSW, different licences allow contractors to perform different types of work. Engaging someone with the wrong licence can create issues around compliance, project responsibility, and the protections available if something goes wrong.
To help explain how this works in practice, we spoke with Kent Hermansen, Director of Down River Building in the Clarence Valley, who regularly sees the consequences of this being misunderstood.
Kent says the issue is more common than many homeowners expect: "Not all trades are licensed to complete a full renovation. We had a client come to us after a near-disaster with an inappropriately licensed tradesperson. We managed to step in and get their bathroom finished before Christmas, but it could have gone very differently."
Not all licences cover all work
In NSW, contractors are licensed for specific categories of work. For example:
- A carpentry licence allows work related to timber framing and structures
- A plumbing licence covers plumbing work only
- A tiling licence covers tiling work only
These are trade licences - they allow a contractor to perform their specific scope of work, but not to take responsibility for an entire renovation or building project.
Kent explains that this is where confusion often arises: "Carpenters, plumbers, tilers - they're all licensed for their trade. But that doesn't automatically mean they can take on and manage a full project. Being licensed in one area doesn't give you the ability to coordinate everything else that comes with a renovation."
Where a project involves coordinating multiple trades, structural changes, or full project delivery, a broader licence is typically required.A building project is made up of hundreds of interconnected decisions - from structure and layout, through to materials, finishes, and services.
A common example: bathroom renovations
Bathroom renovations are one of the most common areas where this issue arises.
At first glance, a bathroom may seem like a combination of trades - plumbing, tiling, carpentry - but legally, the person contracting the job needs to hold the appropriate licence for the full scope of work.
In NSW, a complete bathroom renovation generally requires either:
- a Builder licence, or
- a Kitchen, Bathroom & Laundry Renovation (KBL) licence
A single-trade contractor (such as a carpenter or tiler) is not permitted to take on the entire project unless they hold one of these broader licences.
Kent says this is one of the most frequent issues he sees: "A bathroom reno might involve four or five different trades, including waterproofing and sometimes structural work. If you're the one contracting that job, you need to be licensed to manage the whole thing - not just one part of it. Otherwise there's no clear accountability, and that's where problems start."
This distinction is often overlooked, and can result in projects being run without clear responsibility for the overall outcome.
Structural work requires a builder's licence
The requirements become more important when structural work is involved.
Any work that affects the structure of a home - such as removing walls, altering roof elements, or building extensions - will generally require a Builder licence.
However, many homeowners aren't aware of this distinction and may receive quotes from contractors who are not licensed to carry out that level of work.
Kent notes that this can lead to misleading comparisons: "We lose jobs all the time to guys quoting cheaper without the right licence. On the surface it looks like you're saving money, but they're not pricing the same thing - they're not carrying the same responsibilities or obligations. That's where clients can get caught out."
Why this matters: compliance and project responsibility
Using a contractor outside their licence class isn't just a technical issue - it can affect how the project is managed and what protections apply.
It can raise questions around:
- whether the work meets regulatory requirements
- who is legally responsible for the project
- how contracts and warranties are structured
Kent emphasises that licensing underpins all of this: "Once you step outside the correct licence class, everything else becomes a bit unclear - who's responsible, what's covered, and what happens if something goes wrong. That's why getting the licence right from the start is so important."
For a more detailed explanation of insurance requirements (including HBCF), this is covered separately in our guide to insurances to check before building.
How to check a licence
In NSW, the Verify NSW tool is the primary source for verifying a contractor's licence. It shows whether a licence is active, the licence class, and any conditions or restrictions that may apply.
Build Index can also help simplify the early stages of research. Every builder listed on the platform has an active licence with the Builder class, which covers a broad range of residential building work.
Final thoughts
Checking that a builder is licensed is an important first step - but it's not the full picture. Making sure they hold the right type of licence for your project is just as important.
It influences not only whether the work is compliant, but also how the project is managed and what protections are in place if issues arise.
Taking the time to understand this upfront can help you compare builders more effectively - and move forward with greater confidence.