Strata building bond and inspections scheme
A developer must appoint a building inspector to do the interim and final inspections and reports. The developer can only appoint the inspector after the owners corporation has approved the appointment of the inspector for the interim inspection by a resolution at a general meeting.
The owners corporation has responsibilities to allow access to the strata building to the inspector for the purpose of performing inspections and also the builder to rectify any identified defective building work.
The owners corporation must also engage in the process to determine the cost to rectify defective building work (if any is identified and not rectified).
Strata building bond inspections scheme online portal
The developer must provide the owners corporation details, including an email address, when they lodge the building bond in the Strata building bond and inspection scheme online portal.
The portal will send the owners corporations all notifications to the email address provided by the developer. If the owners corporation has not received notification from the portal, their authorised representative is encouraged to engage with the Building Bond Secretary to verify their details.
The owners corporation must create an account in the portal when they receive email notification that the developer has nominated a building inspector. Access to inspection reports, advice of actions required and the payment of any building bond to the owners corporation will require the current and correct email address registered at the NSW Land Registry Services.
1. Bond lodgement
It is the responsibility of the developer to lodge the building bond.
Tribunal orders - contract price and access to a strata scheme
An owners corporation can apply to the Tribunal for an order to specify the contract price, or to allow the building inspector and/or builder access to the lot or any other part of the scheme for an inspection (interim or final).
For further details on the Tribunal orders, refer to key terms above.
2. Inspector appointment
The portal will notify the owners corporation about the proposed building inspector and any related disclosures about any connection or association with the developer. The inspector must be appointed within 12 months after the occupation certificate is issued, if the initial period of an owners corporation of a strata scheme is completed within that time. The initial period is when the owners corporation changes from being the original owner of the land (i.e. the developer) to the actual owners of the lots. Go to the starting the owners corporation page for more information.
The owners corporation must call a general meeting of the owners to consider the proposed inspector and any disclosures, and pass a resolution to approve or refuse their appointment. The developer can only appoint the building inspector after the owners corporation has approved the position by a resolution at a general meeting. The general meeting resolution is determined by a simple majority. A developer or lessor of a leasehold strata scheme cannot vote, or exercise a proxy vote, on a matter concerning building defects.
The owners corporation must record their decision through the portal and provide a copy of the meeting minutes decision approving or rejecting the building inspector. The developer and the Building Bond Secretary will be notified of the owners corporation’s decision through the portal.
If the owners corporation rejects the nominated building inspector, the developer may if they choose, repeat the process until either the 12 months expires, or the owners corporation approves a building inspector. Once the owners corporation approves the appointment of the building inspector in the portal, the developer, owners corporation, building inspector and the Building Bond Secretary will be notified through the online portal.
An individual owner of a strata scheme lot may object to the owners corporation approval of a building inspector, for any reason. The individual owner must lodge their objection with the Building Bond Secretary within 14 days after the owners corporation approves the appointment. The Building Bond Secretary will decide whether or not to appoint another building inspector, and let those concerned of their decision.
If a developer fails to appoint a building inspector within 12 months, they must notify the Building Bond Secretary through the portal within 21 days after the end of the 12 month period. The Building Bond Secretary will then appoint a building inspector through the portal which will notify the developer, owners corporation and the building inspector of the appointment. The developer must pay all inspector costs, even when the inspector is appointed by the Building Bond Secretary.
3. Interim inspection and report
The building inspector must go to site to do the interim inspection. The building inspector must do the inspection and upload a report to the portal between 15 and 18 months after the occupation certificate is issued.
The building inspector must give at least 14 days’ written notice to the owners corporation, the owner, and any occupant of their intention to enter any part of the strata scheme. The owners corporation, any person who has exclusive use of common property, a strata managing agent, building manager or manager of the common property, and any owner or occupier of a lot must provide any assistance. A person cannot unreasonably refuse a building inspector access to any part of the strata scheme, or obstruct or hinder the inspection.
The interim report must identify any defective building work found on the day or during the period when the interim inspection was done. Once uploaded by the building inspector, the owners corporation will be told that the report is available in the portal.
Within 14 days of being notified, the owners corporation must let the lot owners of the strata scheme know that the interim report has been received, and how they can get an electronic copy.
If there is no defective building work identified in the interim report, the developer can apply to the Building Bond Secretary for a pass on the final inspection/report. In this case, the interim report becomes the final report.
Review of a decision to not require a final report
An owners corporation can apply to the Building Bond Secretary to review the decision that a final inspection/report is not required.
For further details on the application process, refer to key terms above
4. Rectify defective building work
After the interim report is lodged, any defective building work must be fixed between 18 and 21 months after the occupation certificate for the project is issued and before the final inspection starts. The developer is responsible for arranging with their builder and the rectification of any defective building work in the interim report. If the original builder is not available, the developer can arrange for another builder to do the work.
The builder must give at least 14 days’ written notice to the owners corporation, the developer, the owner, and any occupant if they need to enter the area. After providing proper notice, the builder may enter the lot at a reasonable time, or at a time agreed with the owner or occupant of the lot. A person cannot unreasonably refuse a builder access to any part of the strata scheme if the builder has given proper notice.
5. Final inspection and report
The developer will arrange for the building inspector who conducted the interim inspection and report to conduct the final inspection. If the original building inspector is not available, the developer should let the Building Bond Secretary know through the portal, and they’ll arrange for a new building inspector to do the final inspection and report.
Once notified the building inspector must go to the site to do the final inspection and upload the final report to the portal between 21 and 24 months after the occupation certificate is issued. The building inspector must give at least 14 days’ written notice to the owners corporation, the owner, and any occupant to enter the lot.
The owners corporation, any person who has exclusive use of common property, a strata managing agent, building manager or manager of the common property, and any owner or occupier of a lot must provide any assistance. A person cannot unreasonably refuse a building inspector access to any part of the strata scheme or obstruct or hinder the inspection.
Once uploaded by the building inspector, the owners corporation will be notified that the final report is available in the portal. Within 14 days of being notified, the owners corporation must tell the lot owners of the strata scheme that the final report has been received and how they can get an electronic copy.
6. Paying the building bond
For further details on the paying the building bond process, refer to Developer’s section above.
7. Completing the process
The Secretary will notify the owners corporation and the developer of any proposed payment via the portal. The Secretary must not pay the whole or part of an amount secured by a building bond unless they’ve given at least 14 days written notice to the owners corporation and the developer of the strata scheme of the proposed payment.
If an application to review a decision to pay the whole or part of an amount secured by a building bond is made in accordance with the application process, the amount is not to be paid until the application for the review is determined or withdrawn.
Review a decision on a building bond claim
An owners corporation can apply to the Building Bond Secretary to review the decision that all or part of a building bond can be claimed or released for payment to an owners corporation, developer or other person.
For further details on the application process, refer to key terms above.