Building a new home or renovating your current one is an exciting milestone. It’s the moment your ideas start taking shape — from blueprints to bricks. But what should be a smooth experience can quickly turn into a stressful and costly situation if you end up working with dodgy builders.

Across Australia, many homeowners have faced half-finished projects, poor-quality workmanship, or builders who disappear after the first payment. Most of these issues happen because warning signs were missed early on.

The Australian Securities & Investments Commission (ASIC) reports over 3,000 construction sector company insolvencies in the past 12 months, a 28% increase from the previous year. You can avoid these traps with a little awareness and due diligence. Watch out for contractors who show any of the following warning signs.

1. No Valid Licence or Incorrect Licence Type

The first and most important rule — only deal with licensed builders.
A licence isn’t just a formality; it proves the builder meets the standards required to operate legally in Australia. Dodgy builders often make excuses like “my licence is under renewal” or “we’re working under another company’s name.” These are big red flags.

Always ask for the builder’s licence number and verify it through your state or territory’s building authority (like NSW Fair Trading or the QBCC in Queensland). Check that the licence:

• Is active and valid
• Covers the specific type of construction work you need
• Has no disciplinary actions or restrictions

If a builder hesitates to share this information, don’t proceed. It’s that simple.

2. Weak Financial Standing or Shady Company Background

A reliable builder runs a transparent, financially stable business. If your builder avoids sharing basic company information or you find multiple name changes, that’s worth investigating.

Some dodgy builders create new companies to escape debts or hide previous failures. Others operate with ongoing court cases or unpaid subcontractors — all of which can affect your project.

Before signing, do a quick background check. A BuilderInsights report can help you uncover:

• Company registration details
• Credit history and solvency
• Legal or compliance issues
• Links to previously failed businesses

If a builder’s finances don’t look solid, they may not be around to finish your build.

3. A Vague or Rushed Contract

Your contract is your safety net — it defines everything from payment stages to completion timelines. Dodgy builders tend to keep contracts vague, hoping to exploit gaps later.

Be cautious if:

• The contract lacks clear start or finish dates
• Payment terms are unclear
• Warranties and insurance details are missing
• The builder asks you to “just trust them” instead of explaining the fine print

Never sign a contract on the spot. Take your time to review it carefully, and if something doesn’t make sense, have it checked by a building lawyer or advisor. A clear contract protects both you and the builder.

4. Unrealistically Low Quote or Promised Fast Turnaround

Everyone loves a good deal, but if one quote seems far lower than others, it might be a sign of trouble. Dodgy builders often use cheap quotes to win jobs quickly, only to add hidden costs later or cut corners to save money.

Similarly, if a builder promises to finish a large project in record time, ask how they plan to achieve that. Rushed timelines often mean reduced quality or skipped inspections.

Compare multiple quotes and check that each one clearly lists inclusions, exclusions, and timelines. Remember — quality work takes time, and a fair price usually reflects that.

5. No References or Dubious Portfolio

A genuine builder is proud to show their work and connect you with past clients. If your builder avoids providing references or only shares vague photos with no proof of ownership, be careful.

Ask for:

• Contact details of at least two recent clients
• Photos or site visits of completed projects
• Details on project duration and outcomes

When you speak with previous clients, ask if the project finished on time, within budget, and met expectations. If the builder refuses to share this information or makes excuses, it’s a clear sign they may have something to hide.

6. Large Upfront Payments or Pressure to Pay in Cash

Payment structure can reveal a lot about a builder’s intentions. While a small deposit is standard practice, dodgy builders often demand large sums upfront — sometimes 30% or more — before starting any work.

In most Australian states, there are rules that limit how much a builder can request before work begins (usually around 5% for larger contracts). Anything beyond that could indicate financial instability or lack of proper insurance.

Avoid paying in cash and always keep digital records of every transaction. Payments should be linked to clear milestones, such as foundation completion or roof installation. This ensures you pay for progress — not empty promises.

7. Poor Communication and Lack of Transparency

How a builder communicates before the contract often predicts how they’ll behave once work starts. Reliable builders are open, responsive, and transparent. They’ll answer your questions clearly, provide written updates, and share documentation without hesitation.

Dodgy builders, on the other hand, may:

• Avoid calls or emails after quoting
• Fail to confirm discussions in writing
• Delay sending permits, insurance, or plan approvals

These may seem like small issues at first, but they usually grow into bigger problems during the build. Consistent communication is a sign of professionalism — silence or confusion is not.

Dodgy Builders: Don’t Sign Until You’re Certain

There are many honest, hardworking builders across Australia who take pride in delivering quality homes. But the reality is, dodgy builders still exist — and they rely on rushed decisions and unchecked trust to get away with it.

Before you hand over your deposit or sign a contract, take a moment to verify who you’re dealing with. Understanding a builder’s licence, history, and financial background gives you the confidence to move forward safely.

At BuilderInsights, we believe that transparency builds trust. Our tools and builder reports are designed to give you a complete picture before you commit — so you can make decisions based on facts, not promises.

Your home is one of the biggest investments of your life. Protect it by taking the time to do your checks. A few minutes of research today can save you months of frustration, unexpected costs, and endless stress later.

Because when it comes to dodgy builders, prevention is always better than repair.

This blog does not constitute any legal advise.