An update on changes to the strata building bond and inspections scheme, deferring the increase in percentage rate until 2 November 2024.
Changes have been made to the operation of the strata building bond and inspections scheme under the Strata Schemes Management Regulation 2016.
The change defers the strata building bond increase from 2% to 3% until 2 November 2024.
The building bond applies to new strata buildings that do not have home building compensation insurance (Part 6 Home building Act 1989). It is held to secure funds to cover the cost of rectifying defective building work identified after construction and not rectified prior to the final building inspection reports.
The developer lodges the building bond in the NSW Planning Portal. It is a prescribed percentage of the total cost of the building contracts.
The increase of the building bond percentage rate to 3% will apply to all new applications from 2 November 2024.
The building bond is returned to the developer in the case of no defects being identified. When there is defective building work identified, an amount is paid to the owners corporation and where the cost of rectifying defects is less that the amount of bond secured, the remaining amount is returned to the developer.
