The Strata Schemes Management Act 2015 (NSW) sets out a new Defects Bond Scheme, which was to come into effect from 1 July 2017. The scheme will apply to the construction of residential strata scheme properties that have four or more stories, and are therefore not addressed in the Home Building Compensation Fund. The new scheme will require developers to lodge a defects bond which covers 2% of the contract price for the development. There are also requirements for two independent inspections, over a two year period.
Although the Bond Scheme was to come into effect from 1 July 2017, the Electronic Transactions Legislation Amendment (Government Transactions) Bill 2017 (NSW) has now been passed by Parliament, and delays commencement of the scheme until 1 January 2018.