In an article published in December 2016, I outlined some of the key features of the new Building Defect Bond Scheme (the Scheme) introduced under the new Strata Schemes Management Act 2015 (NSW). The Scheme requires (amongst other things) developers to lodge a bond with NSW Fair Trading that is equal to 2% of the contract price for construction of residential and mixed use high rise strata buildings.
The Scheme was to apply to building works carried out on new residential and mixed use high rise strata buildings from 1 July 2017, and in instances where building works are exempt from requiring Home Owners Warranty Insurance.
However, the Electronic Transactions Legislation Amendment (Government Transactions) Bill 2017 (NSW) introduced into the NSW Legislative Council on 24 May 2017, appears to have deferred the proposed commencement of the Scheme until 1 July, 2018. The explanation provided for the deferment of the commencement date (as contained in the Bill's second reading) include:
Subject to the passing of the Bill and any further deferments, the Scheme will only apply to construction contracts signed (or where there is no contract and building work commences) from 1 January, 2018.
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