You’ve got a few quotes. You like one builder, the price feels right, and they seem genuine. Before you hand over a deposit, there’s a short list of checks worth doing because in NSW, whether a builder is properly licensed, insured and contracted is the difference between a protected project and a very expensive problem.
None of this takes long, and a good builder will happily help you do it. Here’s exactly what to check.
Why it matters
Every year, NSW Fair Trading receives thousands of complaints about residential building work, from jobs left unfinished to outright unlicensed operators. The protections exist precisely because things do go wrong. The good news is that NSW has strong consumer safeguards built into law. You just have to use them.
1. Confirm they hold a current NSW licence
In NSW, a contractor licence is required for most residential building work valued over $5,000, and for all specialist work like electrical, plumbing and air conditioning regardless of cost.
You can check any builder’s licence yourself through NSW Fair Trading’s public licence register. Search the licence number or business name and confirm three things:
- The licence is current (not expired, suspended or cancelled).
- It’s held by the exact entity that will sign your contract, the company or person, not a vaguely related name.
- It covers the type of work you’re having done.
If a builder can’t or won’t give you a licence number, that’s the end of the conversation.
2. Check they carry HBCF insurance
For residential work over $20,000 (including GST), the builder must have Home Building Compensation Fund (HBCF) cover, sometimes called home warranty insurance in place before starting work or taking any payment, including a deposit.
This is the big one. HBCF is a last-resort protection: if your builder becomes insolvent, dies or disappears and can’t finish the job or fix defective work, it covers the reasonable cost of completing or rectifying it up to $340,000 (as at 2026). The statutory warranty periods it sits behind are generally six years for major (structural) defects and two years for other defects.
What to do: ask for the HBCF certificate of insurance. It’s issued by icare, names you as the homeowner, states the contract value and shows the policy period. If you’re told “the insurance will follow after the deposit,” that’s the wrong order and against the rules. You can also verify a policy exists through the HBCF Certificates Register at Verify.NSW.
3. Insist on a written contract
For residential building work over $5,000, a written contract is required by law. Over $20,000, more detailed contract requirements apply again.
A proper contract is where your price, timeline and remedies actually live. It should clearly set out the scope, the total price, a payment schedule, and what’s included and excluded. Get your inclusions and exclusions in writing most quote-to-quote price differences come down to scope, not efficiency, and a clear written contract is what stops that becoming a dispute later.
4. Watch the deposit
Under the Home Building Act 1989, the maximum deposit a builder can ask for is 10% of the contract price. A builder demanding 20% or 30% upfront is either unaware of the law or ignoring it either way, a reason to pause.
5. Know your cooling-off rights
NSW home building contracts generally come with a five business day cooling-off period, giving you time to change your mind after signing. A builder who pressures you to waive it or start work immediately isn’t putting your interests first.
6. Ask for references and recent local work
Licences and insurance keep you safe; references tell you whether the work is any good. Ask to see recent, comparable projects, ideally in your area and speak to a past client or two. A confident builder will have both ready.
Red flags to walk away from
If you see any of these, treat it as a serious warning:
- No licence number, or one that doesn’t check out on the Fair Trading register.
- No HBCF certificate for a job over $20,000.
- A deposit over 10%, or “insurance will follow the deposit.”
- No written contract for work over $5,000.
- Cash-only, no receipts it leaves you with no paper trail if something goes wrong.
- Pressure to sign fast or skip the cooling-off period.
A quick note on the numbers
The thresholds above the $20,000 HBCF trigger, the $5,000 licence and contract points, the 10% deposit cap are current, but they do get reviewed from time to time. Before you sign, it’s always worth confirming the current figures directly with NSW Fair Trading. A builder worth hiring will encourage you to check, not discourage it.
The bottom line
Doing these checks isn’t distrust it’s just good practice, and the right builder will make it easy. That’s the standard we hold ourselves to.
Mitroteam Projects is a licensed NSW builder (Licence No. 305670C, verifiable through NSW Fair Trading), we carry the required insurances, we work from clear written contracts with inclusions and exclusions set out in full, and we’re happy to point you to recent work across Blacktown and the Hills District. It’s all part of the “no surprises” way we’ve built for over a decade. You can read more about us or see how our building process works.
Planning a renovation, extension or second dwelling? Get in touch and check us out first. We’d rather you did.