• Anyone involved in residential building works in New South Wales.


  • Although not official yet, the new defects bond scheme under the Strata Management Scheme Act 2015 (NSW) may now commence 1 January 2018.

Under the Strata Schemes Management Act 2015 (NSW) (Act), developers will be required to lodge a 2% (of the contract price for the building work) bond to the Department of Fair Trading to secure any future defective building work. The commencement date for the defects bond scheme will now likely be postponed from 1 July 2017 to 1 January 2018. Further details about the scheme can be found here.

The Act currently provides 1 July 2017 as the commencement date for the new defects bond scheme. However the Electronic Transactions Legislation Amendment (Government Transactions) Bill 2017 (NSW) (Bill) contemplates a new commencement date of 1 January 2018. The Bill can be found here.

The Bill is yet to be debated in the legislative assembly and with the next parliamentary sitting day not until 20 June 2017, confirmation of the Bill and any delay to the commencement date will not be determined until at least 20 June 2017. This means relevant industry participants will need to wait until 10 days (at the earliest) prior to the current commencement date (1 July 2017) to know whether they will need to comply with the scheme requirements as of 1 July 2017.

We anticipate that the requirements under the defects bond scheme will likely not come into effect until 1 January 2018, however we recommend that all industry participants for the time being be prepared for the changes as if they were to come into effect on 1 July 2017.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.