Developers Require to Post Bond for Strata Remedial Work

Changes to NSW strata laws will give greater protection for owners.

Peter Rusbourne of Watkins Tapsell lawyers said that several significant amendments to strata laws in NSW are to occur in 2016. At this stage the exact date on which these changes will come into effect is unknown but it is expected to occur in mid 2016.

These changes will apply where:

1. Building work is carried out for the purposes of, or at the same time as, the registration of a strata plan, and

2. The development is residential or for mixed use with one purpose being residential, and

3. Building works for which insurance policies under the Home Building Compensation Fund are not required pursuant to the Home Building Act. The HBA does not require insurance for multi storey developments that:

4.  3.1 Are over three storeys in height; and
3.2 Contain two or more separate dwellings.
Changes directly affecting developers

Some of the key changes that will affect developers are:

Payment of a bond

1. Developers will need to give to the secretary of the Department of Finance, Services & Innovation a bond equivalent to 2 per cent of the contract price for the building work. This bond will serve as security for the rectification of any building defects.

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