Homeowners planning a new build or renovation should investigate a contractor’s licence, insurance, business history and previous work before signing an agreement or paying a deposit.

Recommendations from relatives, friends and colleagues remain a useful starting point, but they should be supported by independent checks. Recent online reviews can reveal recurring concerns, while prospective clients should also ask for references and, where possible, inspect completed projects similar in size and complexity to their own.

The NSW Government recommends asking previous customers whether work was completed on time and within budget, whether defects were addressed promptly and who supervised the project. It also advises checking the contractor’s Australian Business Number and verifying that the person or company holds the appropriate licence.

Licensing systems differ between states and territories. Accorinding to an ABC News report, consumer authorities and Master Builders Australia generally recommend checking licences and insurance, viewing previous work, reading reviews and putting the entire agreement in writing.

Homeowners should seek several detailed, written quotes based on the same plans and specifications. Each quote should identify materials, labour, exclusions, expected timeframes and responsibility for approvals and waste removal. An unusually low quote may indicate that important work has been excluded or underestimated.

ASIC advises checking that the contractor’s ABN matches the business being hired. For companies, consumers can also search ASIC records to determine whether the business is registered, under external administration or linked to a different entity. Registration alone, however, does not guarantee reliability.

Contract and payment requirements also vary. In NSW, residential building work valued above $5000 generally requires a written contract, while work exceeding $20,000 requires a more detailed contract and Home Building Compensation cover. Deposits cannot exceed 10 per cent of the contract price, and progress payments should correspond with completed work.

Contractors should also hold appropriate public liability and contract works insurance. Homeowners undertaking renovations should notify their own insurer before construction begins, as existing home and contents cover may be affected.

The best contractor is not necessarily the cheapest, but the one offering a transparent price, suitable experience, valid credentials and clear communication.

Information in this article is believed correct at time of writing, however laws and requirements can change, so always seek professional advice specific to your circumstances.