Australia:
Delays to the implementation of the NSW residential developer bond and defect inspection regime
26 June 2017
Colin Biggers & Paisley
To print this article, all you need is to be registered or login on Mondaq.com.
IN BRIEF - LEGISLATION APPEARS TO HAVE BEEN DEFERRED
UNTIL 1 JANUARY 2018
In October last year, we identified some key concerns about the
proposed "developer bond regime" to be introduced by the
new Part 11 of the Strata Schemes Management Act 2015 (NSW) in our
article "
Seven things every developer, builder, financier and strata
manager should know about the imminent application of Part 11 of
the Strata Schemes Management Act 2015".
The regime entails (amongst other things) the provision of a 2
per cent bond by developers engaged in residential building work
associated with the creation of a strata scheme, and a defects
inspection procedure that provides a trigger either for the ability
of the strata scheme to call on that bond, or for the return of the
bond to the developer.
This legislation was due to take effect from 1 July 2017 in
respect of applicable building contracts executed on or after that
date.
However, it appears now that the relevant date will be deferred
until 1 January 2018. The deferral is contained within the omnibus
Electronic Transactions Legislation Amendment (Government
Transactions) Bill 2017 (NSW), introduced into the New South Wales
Legislative Council on 24 May 2017. The bill's
second reading speech contains the following explanation for
the deferral:
This amendment acknowledges that
a number of issues have arisen, which mean that it is prudent to
delay commencement of the scheme. Since 2016 Standards Australia
has been working with a group of industry experts to develop a new
national standard known as AS4349.2 – Group titled
properties. The standard is important as it will form part of the
defect inspection report that is applied by the scheme.
Unfortunately, the standard is not complete and unlikely to be
finalised by Standards Australia until after July 2017.
Furthermore, over the past five
months NSW Fair Trading has been engaging with peak bodies in the
legal, strata and building sectors to prepare for the scheme. NSW
Fair Trading acknowledges stakeholders' continued support for
the scheme but also notes feedback that the July 2017 commencement
date would not afford some participants sufficient time to develop
their supporting processes and procedures. The amendments will mean
that the scheme will only apply to construction contracts signed or
work that commences from 1 January 2018.
Andrew Murray
Construction and engineering
Colin Biggers & Paisley
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.
POPULAR ARTICLES ON: Real Estate and Construction from Australia
Short Term Holiday Lets In Jersey
Carey Olsen
Property owners in Jersey now have clarity regarding the use of their residential properties as short-term holiday lets.
Acquiring Property In Bermuda
Conyers
A solitary outpost of beauty and civility in the mid-north-Atlantic, Bermuda enjoys a delightful sub-tropical climate entirely incongruous with its northerly latitude.
Rent Control Law: New Decree On Increase In Rent Rates
Michael Kyprianou Law Firm
Owners of real estate properties, which fall under the scope of the "Rent Control Law of 1983 (23/1983)" as amended (the "Rent Control Law"), are entitled to raise rent rates to their tenants...