Strata building bond and inspections scheme
THE SCHEME
The strata building bond and inspections scheme began on 1 January 2018. It applies to building contracts executed from this date – or where there is no written contract – building work that commences from this date, to construct residential or partially-residential strata properties that are four or more storeys. Buildings that are three storeys or under are covered under the Home Building Compensation Fund.
This scheme includes a building bond by the developer and mandatory defect inspections and reports on the development by an independent building inspector. It provides a structured, proactive process that resolves building issues quickly and cost effectively, early in the life of the building.
Developers must arrange for and lodge a building bond with NSW Fair Trading equal to 2 percent of the contract price for the building work. The building bond must be lodged before the occupation certificate is issued. The building bond secures funds (up to the amount of the bond) to be used to pay for any defective building work that’s identified in a final inspection report.
ONLINE PORTAL
The strata building bond and inspections scheme is administered by an online portal. Developers can register to use the portal at any time before the occupation certificate is issued. Project details can be entered and documents uploaded at any time, as they become available. These documents should reflect the completed building just before any occupation certificate is issued (not the start of the build).
All written notices required under legislation must be completed in the portal. Users are able to complete actions online and the portal will auto-generate alerts and emails to relevant parties.
FURTHER INFORMATION
NSW Fair Trading has more information on their scheme page.
You can also make contact with Melanie Schwerdt, Manager Strata Building Bond & Inspections Scheme on (02) 9895 9094 or melanie.schwerdt@finance.nsw.
Alternatively, 13 32 20 (8:30am to 5pm, Monday to Friday) or stratabond@finance.nsw.gov.au
Please note that this article is provided for information purposes only and is not a substitute for professional legal advice. If you have a question specific to your property or development, please contact us.
