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At the commencement of 2018 the new strata building bond and inspection scheme started.

The strata building bond and inspection scheme is designed to incentivise developers ensuring that there is a clear process for builders to minimise any building defect issues in new residential high-rise strata blocks.

 Proposed regulations and Amendments

Proposed amendments to the Strata Building Bond and Inspection Scheme have recently been announced.

Currently, under the scheme developers are required to lodge a bond of 2% for residential and mixed-use high-rise strata buildings of 4 or more storeys.

The proposed amendments to the strata building bond and inspection scheme seek to enhance the ability of Fair Trading to verify the building contract price (on which the 2% building bond is based) and to clarify the role of the building inspector in the scheme.

So, what are the specific proposed amendments?

• Developers must lodge a building bond before applying for the occupation certificate (rather than at any time before an occupation certificate is issued, as is currently required)
• The owners corporation and the developer must agree on the amount to be released from the bond to meet the costs of fixing identified building defects. If they cannot agree, the Secretary will determine this amount
• New investigative powers for Fair Trading to enable verification of the amount of the contract price or building bond, including new entry to premises and search warrant powers
• An increase in the maximum penalty for a developer failing to lodge the building bond from 200 penalty units ($22,000) to 10,000 penalty units ($1.1 million)
• An offence for developers to provide false or misleading information to the Secretary in relation to the contract price or the building bond
• A new ‘good faith’ liability protection for building inspectors, and the professional associations that appointed them, which excludes them from liability for anything done (or omitted to be done) in ‘good faith’ in conducting an inspection

 Have your say!

The deadline to have your say on the proposed Bill and/or Regulation amendments is 11 May 2018, visit NSW Fair Trading to have your say.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

Read the full Sydney Morning Herald (SMH) article here.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

The Supreme Court has decided that structural defects under the old home building legislation do not extend to cover building elements such as waterproofing membranes and tiling attached to structural components of the building.

This is bad news for owners corporations of residential buildings who made home warranty insurance claims or defect claims against builders and developers before 2015 that are still current because it will essentially limit the scope for them to argue that defects are structural defects that are covered by a six year warranty instead of the two year warranty for non-structural defects.

For owners corporations of residential buildings, this is bad news – Strata and Structural Defects.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

What should you be aware of?

On 9 May 2014 the Home Building Amendment Bill 2014 was introduced to the Legislative Assembly of the New South Wales Parliament. It passed that House on 14 May 2014.

The object of the Bill is to amend the Home Building Act 1989 (“HBA”) in connection with matters including:

• Penalties for unlicensed work;
• Contracts to do residential building work or specialist work;
• Contracts to supply kit homes;
• Statutory warranties implied into contracts;
• Provisions relating to contractor licences, supervisor certificates and tradesperson certificates including broadening the grounds for disqualification;
• Notification of insolvency, winding-up or de-registration of licence holders;
• Owner building;
• Resolution of building disputes;
• Disciplinary proceedings;
• Home warranty insurance;
• Owner builder kit homes and requirements for obtaining contractor licences;
• Other minor consequential or ancillary matters.

The HBA is an act with which strata title lawyers need to be familiar. Building defects are one of the largest areas of complaint from those living in strata schemes in this state. Unfortunately for those practicing in the area, the HBA is one of the most frequently amended pieces of legislation in New South Wales.

The emphasis of this paper is on the amendment of those areas of the HBA which are most commonly used by strata lawyers. This paper is not designed as a general overview of the HBA and the amendments and assumes a basic knowledge of the HBA from a strata perspective.

Click here to download the full paper Home Building Act Amendment

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.