Here is a reminder about the strata building bond and inspections scheme, which started on 1 January 2018.
The scheme requires a building bond to be lodged with Fair Trading before an occupation certificate is issued for certain building works. This could affect certifiers, retention payments to builders and developer/owner settlements with new purchasers.
It mostly relates to building contracts entered into from 1 January 2018 where the building work is on residential or mixed-use strata buildings four storeys or higher. If there is no contract, the scheme applies to building works started on or after 1 January 2018.
The process involves:
- the developer needs to lodge a bond of two percent of the building’s contract price with Fair Trading
- between 15 and 18 months after the issue of an occupation certificate, an interim inspection by a building inspector on a strata inspector panel identifies any defective building work
- the developer and builder rectify any defects before the final inspection.
- between 21 and 24 months after the issue of an occupation certificate, a final inspection is then carried out by the same building inspector
- if the developer has not fixed the defects, the owners’ corporation will use the bond to pay for any identified but unrectified work.
If you are looking to buy or are working on such building works and need more information or help, please email us at email@example.com.
Source: NSW Government