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ARTICLE · 11 JUNE 2017

Residential Focus - 7 June 2017 - Part 1: Strata developments in NSW

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Developers and builders must take note of a new building bond and defect rectification regime for strata developments.

AustraliaReal Estate and Construction
Christine Jones
Christine Jones
Georgia Appleby
Georgia Appleby
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Developers and builders take note!

On 1 July 2017, the new Part 11 of the Strata Schemes Management Act 2015 (the Act) and Part 8 of the Strata Schemes Management Regulation 2016 (the Regulation) will take effect.

This introduces a new building bond and defect rectification regime which will apply to all building contracts entered into after 1 July 2017 for those multi-storey residential or mixed-use strata developments where it is not mandatory to have a policy of insurance under the Home Building Compensation Fund.

The two key elements of the regime fall require the developer to:

  1. lodge a building bond equivalent to 2 per cent of the contract price; and
  2. appoint a building inspector (at the developer's cost) to prepare an interim report within 15-18 months from completion and a final report within 21-24 months from completion.

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