NSW Strata Building Bond and Inspections Scheme (SBBIS) Explained

The Strata Building Bond and Inspections Scheme applies to class 2 buildings in NSW that are four storeys or more, where construction started after the scheme commenced. Under SBBIS, the developer must lodge a building bond equal to 2 percent of the contract price with NSW Fair Trading.

The bond is held against the cost of rectifying defective building work. To draw on it, the owners corporation must rely on independent inspection reports prepared at two specific milestones. The interim report is commissioned between 15 and 18 months after completion, identifying defects that have emerged during the early occupation period. The final report is commissioned between 21 and 24 months, refining the defect list and quantifying rectification costs.

The reports must be prepared by a building inspector drawn from the NSW Fair Trading panel, owners corporations cannot just use any inspector they like.

SBBIS does not apply retrospectively, so older buildings do not have the same protection. It also has limits, the 2 percent bond may be insufficient for serious defects, and the scheme does not eliminate the need for owners corporations to take separate legal action under the statutory duty of care.