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Strata bond defects to begin 1 January 2018

12 December 2017

By Amanda Farmer, Director of Lawyers Chambers on Riley

Developers of residential and mixed-use high-rise strata buildings will be required to lodge a bond equivalent to 2% of the building contract price with NSW Fair Trading from 1 January 2018.

Over the past six months, NSW Fair Trading has been working with stakeholders in the strata, legal, building and development sectors to further develop the scheme, originally scheduled to commence on 1 July 2017.

However, the start date was pushed back to 1 January 2018 to allow time for this further consultation. 

NSW Fair Trading recently reported that the result of this further consultation is the “Strata Building Bond and Inspections Scheme” (SBBIS). 

It is intended that three supporting documents will help administer the SBBIS:

  1. Building Bond Guidelines;

  2. Strata Inspector Panel Guidelines; and

  3. Building Inspection and report. 

To date, these documents have only been released in draft and submissions closed on 29 November 2017. 

NSW Fair Trading now has the task of considering all comments before finalising the documents and it is hoped the 1 January 2018 deadline will be met.  

The introduction of the SBBIS is also being supported with an online portal, which NSW Fair Trading says will:

  • assist developers to lodge their bond, provide written notifications and appoint building inspectors,

  • support building inspectors to lodge and provide copies of their reports to the required persons through the platform (including strata managers)

  • provide notifications to key users (including strata managers and other representatives of owners corporations)

  • enable approvals to be issued through the system

  • allow users to view documents relevant to them.

Find out more here, which includes access to the draft guidelines and report