The NSW Pre-Contract Builder Checklist

Most pre-contract checklists, including the official NSW Government owner checklist, are contract review tools. They assume you have already chosen your builder and have the document in front of you. They tell you to check that the price is on page one and that the deposit is under 10%.

Those checks matter. But they are the last step, not the first.

The checks that matter most happen earlier, before you shortlist, before you ask for a quote, before you are emotionally or financially committed to anyone. By the time a contract arrives, the hard decisions are largely made. This checklist covers both stages.

In 2024–25, 14,722 companies entered external administration nationally, the highest annual total since 1999–2000. Construction accounted for approximately 26% of all failures, with NSW alone recording 1,567 construction company collapses, 44% of the national total (ASIC Corporate Insolvency Update, September 2025; NSW figure via secondary reporting citing ASIC data). The HBCF has paid out more than 4,800 claims at an average of $64,800 since 2002. These are not edge cases. They are the reason a systematic pre-contract process exists.

Part 1: Before You Shortlist - Background Checks

These nine checks should be completed before you invite a builder to quote. They use publicly available government registers, take less than two hours combined, and cost nothing to $15.

1. Confirm the contractor licence (not just any licence)

Source: verify.licence.nsw.gov.au (free)

Search by name, licence number, or ABN. Confirm the builder holds a contractor licence (Building), the licence class that authorises them to enter contracts with you. A Qualified Supervisor Certificate allows the holder to carry out and supervise the work described on the certificate, but not to contract with you in their own right unless they also hold the relevant contractor licence.

Check for: current status, expiry date, licence category, any conditions endorsed on the licence, formal cautions, penalty infringement notices, public warnings, and, most importantly, any record of non-compliance with a tribunal order. Any such record is a serious warning sign: at minimum, it indicates an order was made and not complied with within the required time. Confirm the current status of any such record directly with the builder or NSW Fair Trading before proceeding.

2. Verify the entity identity and ABN

Source: abr.business.gov.au (free)

Enter the ABN from the builder's quote or website. This confirms the legal entity type (company, sole trader, trust, or partnership), the registered legal name, any registered trading names, and GST status.

The entity named on your contract must be the entity that holds the licence. A common trap: a contract signed with a trading name ("Sydney Premium Homes") where the actual contracting entity is a different Pty Ltd whose licence status and financial health you have not checked.

3. Check the company's ASIC status and director history

Source: connectonline.asic.gov.au (free basic, $9-$19 for a company extract)

Search by company name or ACN. The free search confirms current company status. Watch for: Under External Administration (liquidator or administrator appointed: work will stop and you become an unsecured creditor), Under Receivership, or Deregistered (company no longer legally exists).

A paid ASIC company extract shows current and historical director information. Cross-reference director names against publishednotices.asic.gov.au to check whether companies they have previously directed have entered external administration. A director associated with multiple previously liquidated construction entities warrants a direct question before you proceed.

4. Search for personal insolvency: the director, not the company

Source: AFSA National Personal Insolvency Index ($15 per search)

ASIC records cover the company. AFSA records cover the individual. A $15 search by name and date of birth returns any bankruptcy, debt agreement, or personal insolvency agreement going back to 1928.

A sole trader who has been bankrupt may have licence conditions limiting them to contracts of $20,000 or less, a restriction visible on the licence register. A company director who is currently bankrupt is legally required to disclose this to Building Commission NSW within 7 days. Searching AFSA lets you verify the director's personal financial history before it becomes your problem.

5. Check the ASIC Banned and Disqualified Register

Source: ASIC banned and disqualified register (free)

A person on this register is disqualified from managing a corporation. A building company under the effective control of a disqualified director may be in breach of the Corporations Act. This check takes two minutes.

6. Search for published tribunal decisions (NCAT)

Source: NSW Caselaw (free): select NCAT, filter by Consumer and Commercial Division

Search the builder's exact legal name. Published decisions reveal resolved disputes involving defective work, contract breaches, and incomplete projects. Note: only a selection of NCAT decisions are published: a clean result means no published decisions, not that no disputes have occurred. Any non-compliance with a tribunal order will also appear on the licence register (check 1).

7. Look for phoenixing indicators

Sources: Cross-reference the ASIC company extract, ABN Lookup, and ASIC Published Notices

Illegal phoenix activity involves deliberately winding up a company to avoid paying creditors, including homeowners, and immediately starting a new entity to continue the same work. ASIC and the ATO both identify construction as a sector with elevated phoenix risk.

Four patterns to check:

• Company incorporated within the last one to two years while the director claims many years of experience: ask what happened to the previous entity
• Director associated with multiple companies in the same trade that have entered external administration
• Company name similar to a recently liquidated entity
• Same address or phone number as a deregistered company

These are not automatic disqualifiers. They are questions to ask directly. For a detailed detection guide, see How to Check If a Builder Is Phoenixing.

8. Check their HBCF eligibility tier

Source: Ask the builder directly, or request confirmation from iCare on 13 44 22

HBCF eligibility and capacity settings can affect whether a builder can obtain cover for your specific project, even if they hold a valid licence. Confirm this early with the builder and, where needed, directly with iCare on 13 44 22 before you invest time in detailed quoting.

9. Ask for references from recent completed projects

Not testimonials from their website: contact details for homeowners from projects completed in the last two years. A builder who cannot provide these, or who provides references that cannot be independently contacted, is a concern.

Part 2: Before You Sign - Contract and Insurance Checks

Once you have shortlisted a builder and received a contract, these nine checks verify that the document and the insurance are legally compliant and complete.

10. Confirm a Certificate of Insurance (not a Certificate of Eligibility)

Source: HBC Check portal (free)

For any contract over $20,000, a builder cannot legally accept any payment, including a deposit, until a Certificate of Insurance has been issued for your specific project. A Certificate of Eligibility confirms the builder can obtain cover; it is not the same thing. Search the HBC Check portal by the property address or the builder's name to confirm a Certificate of Insurance exists before you pay anything.

11. Verify public liability and workers compensation certificates

What to request: A Certificate of Currency for each policy, directly from the builder

Public liability insurance should be current and adequate for the scope of your project. Workers compensation is legally required for all NSW employers. NSW consumer guidance makes clear that homeowners can face exposure if a contractor does not hold appropriate insurance. Check that the insured entity name on each certificate matches the name on your contract, and verify authenticity by calling the insurer on their publicly listed number, not the number on the certificate.

12. Confirm the deposit does not exceed 10%

Under section 8 of the Home Building Act 1989, the maximum deposit for residential building work is 10% of the contract price. Any deposit above this limit is unlawful. The penalty for demanding an excessive deposit is up to $110,000 for a corporation.

13. Confirm the contract is in writing and contains the mandatory inclusions

Under section 7 of the Home Building Act 1989, all residential building contracts over $5,000 must be in writing, signed by both parties, and include: the names of all parties (with the licence holder's name as it appears on the licence), the licence number, a description of the work to be done, plans and specifications, the contract price where known, statutory warranty information, and, where applicable, cooling-off and progress-payment information. For contracts over $20,000, the cooling-off statement is a mandatory inclusion.

14. Confirm the Consumer Building Guide was provided

Under section 7AA, the builder must provide a copy of the approved consumer information (the Consumer Building Guide) before you enter any contract over $5,000. If it was not provided, the builder may be in breach of the Act. That is a red flag and worth addressing before you sign. The current guide was updated February 2026.

15. Know your cooling-off rights

Under section 7BA, you generally have 5 clear business days after receiving the signed contract to rescind by written notice. That period can only be shortened or avoided through the specific certificate process allowed by the Act. If you rescind, the builder may be entitled to recover a reasonable price for any work already carried out.

16. Understand what the statutory warranties cover, and what they don't

Under section 18B, six implied warranties attach to all residential building work regardless of what the contract says: work performed with due care and skill; materials suitable for their purpose; compliance with plans and specifications; for new builds, reasonable fitness for occupation; and completion within a reasonable time. These apply for 6 years (major defects) or 2 years (other defects) and pass to subsequent owners.

HBCF is last-resort cover, triggered only by builder insolvency, death, disappearance, or licence suspension for tribunal non-compliance. If the builder is still trading, homeowners generally pursue defects directly against the builder under the statutory warranty regime and, where necessary, through NCAT or the courts.

17. Confirm the contract variation procedure in writing

Undocumented variations are one of the most common causes of residential building disputes in NSW. Before signing, confirm: what written approval is required before a variation proceeds; how the cost of variations is calculated; and what happens if you and the builder cannot agree on a variation price.

18. Check the entity name on the contract matches the licence and HBCF records

This is the final cross-check. The legal entity named in the contract should match: the entity named on the NSW Fair Trading licence register; the entity on the HBCF Certificate of Insurance; and the ABN confirmed via ABN Lookup. Any mismatch requires a written explanation from the builder before you sign.

The Checks Most Competitors Miss

The official NSW Government checklist covers items 10–18 above. It does not address items 1–9. Most third-party guides focus on the contract stage and cover some due diligence topics, but do not walk through the full sequence of pre-shortlisting register checks this checklist covers.

The nine background checks in Part 1, including entity identity, ASIC company status, director history, personal insolvency, the banned and disqualified register, NCAT tribunal records, and phoenixing patterns, represent the category of risk that most consumers discover too late.

For a detailed guide to running each of these checks step by step, see How to Check a Builder in NSW: The Complete Verification Guide.

If you want to work through the registers yourself, all the public sources referenced in this checklist are linked in one place at TrustSignal Public Registers. Keep in mind that public registers show what has been formally recorded, not everything. A TrustSignal Builder Report combines public register data with proprietary datasets to give you a single, concise picture of a builder's background in minutes.

Statutory references: Home Building Act 1989 (NSW), sections 7, 7AA, 7BA, 8, 18B, 92. Data current as of March 2026. This checklist is a consumer education resource and is not legal or financial advice. If you have concerns about a specific builder, contact NSW Fair Trading on 13 32 20 or seek independent legal advice before signing.