Real examples
Failing to respond to a Direction to Rectify leads to higher claim costs and no second chance to fix defects.
Meet Alex, a licensed contractor.
- Alex received a Direction to Rectify for defective work.
- He fixes some items but disagrees with others and doesn’t complete the full list.
- He misses the deadline to formally review the Direction.
What happens next?
- The QBCC issues a Failure to Rectify notice.
- A building inspector prepares a scope of works.
- The claim is approved and the QBCC pays another contractor to fix the defects.
Alex doesn’t get another chance to fix the defects himself. Whether he misses the review deadline or is unsuccessful, the QBCC proceeds with the claim, arranges repairs, and recovers the cost from Alex. This cost is significantly higher than fixing the defects himself.
Company directors can be personally liable for claim costs if their company fails to rectify defective work.
Meet Priya and Derek, directors of a building company.
- Their company was contracted to build a home.
- The QBCC issued a Direction to Rectify, but the company didn’t complete the work.
- The claim was approved, and the QBCC paid another contractor to fix the defects.
- The cost of the claim was recovered from Priya and Derek.
- The claim cost was significantly higher than if the company had fixed the defects directly.
Even though the work was carried out by a company, Priya and Derek are personally liable because they were directors at the time the work was done or when the claim was paid. Under section 111C of the QBCC Act, they can both be held personally responsible for the full cost of the claim.
This is called joint and several liability. Each director can be pursued for the full debt, even if other directors:
- have passed away
- can’t be located
- are bankrupt.
Priya and Derek are still fully responsible.