In September we wrote about some of the proposed changes to New South Wales’ strata management legislation that will come into force in mid-2016.
When the new Strata Management Act commences, property developers of multi-level apartment buildings will be required to contribute 2% of the contract price into a ‘building bond account’ before an occupation certificate can be issued. Currently, property developers of buildings with over three storeys are not required to be insured under the Home Building Compensation Fund.
If the final building report detects defective work and provides an estimate for the rectification work, the money provided for in the building bond account will be distributed to the owners’ corporation for rectification work to be undertaken.
The money in the building bond account can only be refunded to the developer when:
- When a final inspection report showing no defects is provided to the developer; and
- Two years has passed following the completion of the building work.