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Residential Focus: New rules for building bonds

07 February 2024

14 min read

#Property, Planning & Development

Published by:

Brandon Thai, Caitlyn Trussell

Residential Focus: New rules for building bonds

On 19 January 2024, the Strata Schemes Management Amendment Regulation 2024 (Regulation) commenced. The Regulation made three changes to the Strata Building Bond & Inspections Scheme, more colloquially known as the building bond scheme. We set out a brief outline of these changes below.

Build-to-rent housing

The Regulation inserts a new Clause 44A to the Strata Schemes Management Regulation 2016 (NSW) (SSMR).

This clause exempts certain build-to-rent projects from the building bond scheme. To qualify, the project must be:

Notably, to qualify for this exemption from the building bond scheme, the project requires a significant portion of the labour force carrying out the works to be drawn from disadvantaged classes of workers. These classes of workers include apprentices, long-term unemployed workers, workers with barriers to employment such as disability and Aboriginal jobseekers (see section 9E(2)(c) of the LTMA).

Clause 44A aims to make low-income housing projects more attractive to developers, with an additional policy focus of supporting workforce entry and labour force depth in the construction industry.

Change in cutover date for the increase in the building bond

The Regulation also amends the cutover date for the building bond increase from 2 per cent to 3 per cent from 1 February 2024 to 1 July 2024.

The amended clause 54 of the SSMR now reads:

54   Amount of building bond

For the Act, section 207(2) and (4), the prescribed percentage is as follows –

(a)  for a building bond given before 1 July 2024 – 2%,

(b)  for a building bond given on or after 1 July 2024 – 3%.”

Cancellation of the building bond

Finally, the Regulation introduces clause 55AA to the SSMR, which covers situations where the Secretary may release the building bond back to a developer.

The three situations where this can occur is where the:

  • final inspection report does not identify any defective building work
  • report only identifies defects that fall outside of the qualifications under section 209 of the Strata Schemes Management Act 2016 (SSMA)
  • secretary is satisfied that it is appropriate to cancel the building bond.

It is somewhat unclear which defects would fall outside of section 209 of the SSMA, as defects that constitute a breach of statutory warranty under Part 2C of the Home Building Act 1989 are already captured.


By deferring the percentage increase in the building bond, developers are given breathing room during tricky market conditions, whilst the drive towards decennial liability insurance is maintained. The exemption for build-to-rent is long term play to support broader policy goals to address the housing crisis and create employment opportunities for disadvantaged workers.

If you have any questions regarding this article, please get in touch with a member of our team below.

Authors: Christine Jones & Brandon Thai

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Unique Building and Construction Services Pty Ltd v Gray [2024] NSWCATAP 16
APPEALS – Australian Consumer Law – no question of principle.
Civil and Administrative Tribunal Act 2013 (NSW), ss 27, 80, cl 12 of Sch 4; Retail Leases Act 1994 (NSW).

The Owners – Strata Plan No 53865 v JPG Investments Pty Ltd [2024] NSWCATAP 12
LAND LAW – Strata title – Consent of owners corporation to the lodging of a development application to works affecting common property – s 232(6) Strata Schemes Management Act 2015 – Mandatory considerations –Relevant considerations – Applicable principles.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Environmental Planning and Assessment Act 1979 (NSW); Strata Schemes Management Act 2015 (NSW).

Singh v Building Commission NSW [2024] NSWCATOD 7
REVIEW OF DECISION BY EXTERNAL DECISION-MAKER – decision to cancel registration as a certifiers pursuant to section 48 of the Building Professionals Certifiers Act 2018 (NSW).
PRACTICE AND PROCEDURE – INTERLOCUTORY ORDER – application for stay – factors relevant to exercise of the power to stay decision under section 60 of the Administrative Decisions Review Act 1997 (NSW).
Administrative Decisions Review Act 1997; Building and Development Certifiers Act 2018; Building Professionals Act 2005.

The Owners – Strata Plan NO. 64807 v Sunaust properties Pty Ltd [2024] NSWCATCD 2
PRACTICE AND PROCEDURE – Transfer of proceedings from Consumer and Commercial Division of NCAT to a court – Sch 4 cl 6 of the Civil and Administrative Tribunal Act 2013 – effect of Sch 4 cl 5 (jurisdiction to determine issues) on power of transfer – relevant considerations in determining whether to transfer proceedings.
Civil and Administrative Tribunal Act 2013 (NSW); Residential Tenancies Act 2010 (NSW); Strata Schemes Management Act 1996 (NSW) (repealed); Strata Schemes Management Act 2015 (NSW)

Mourad v Commissioner for Fair Trading [2024] NSWCATOD 5
ADMINISTRATIVE REVIEW – Registration under the Design and Building Practitioners Act 2020 (NSW) – Cancellation of deemed registration – whether the Applicant is a suitable person.
Administrative Decisions Review Act 1997 (NSW); Civil and Administrative Tribunal Act 2013 (NSW); Design and Building Practitioners Act 2020 (NSW); Design and Building Practitioners Regulation 2021 (NSW).

The Owners – Strata Plan NO 4393 v Roberts (No 2) [2024] NSWCATCD 1
LAND LAW – Strata title – civil penalty – contravention of Tribunal orders – s 247A Strata Schemes Management Act 2015 – multiple breaches of orders – amount of penalty – when maximum penalty might be imposed – whether penalty should be paid to applicant owners corporation.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Strata Schemes Management Act 2015 (NSW).

Orfali v Commissioner for Fair Trading [2024] NSWCATOD 4
ADMINISTRATIVE REVIEW – Registered certifier – Whether disciplinary grounds established – Whether decisions to cancel applicant’s registration and disqualify him from registration for 10 years are the correct and preferable decisions.
Administrative Decisions Review Act 1997 (NSW); Building Professionals Act 2005 (NSW) (repealed); Building and Development Certifiers Act 2018 (NSW); Building and Development Certifiers Regulation 2020 (NSW); Building Professionals Regulation 2007 (NSW) (repealed); Environmental Planning and Assessment Act 1979 (NSW); Environmental Planning and Assessment Regulation 2000 (NSW) (repealed); Environmental Planning and Assessment Regulation 2021 (NSW); Standard Instrument—Principal Local Environmental Plan (2006 EPI 155a) (NSW); State Environmental Planning Policy (Affordable Rental Housing) 2009 (NSW) (repealed); State Environmental Planning Policy (Housing) 2021 (NSW); Strata Schemes Development Act 2015 (NSW); Swimming Pools Act 1992 (NSW).

TCM Construction Group Pty Ltd v Neich [2024] NSWCATAP 4
APPEAL – appeal from orders requiring the appellant to remedy defective work-whether a question of law arises – whether there is a ground for leave to appeal to be granted-conflicting evidence of expert witnesses.
Civil & Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW).

TPG Telecom Limited v Inner West Council [2023] NSWLEC 1778
APPEAL – development application – telecommunications facility – monopole with headframe – proposed on the site of an existing substation adjacent to heritage listed Callan Park – impact on setting and views to heritage item – visual impact – compatibility with character of the area – issues of site selection.
Callan Park (Special Provisions) Act 2002; Environmental Planning and Assessment Act 1979, ss 4.15, 4.16, 8.7; Inner West Local Environmental Plan 2022 cl 1.8A; Interpretation Act 1987, s 30A; Leichhardt Local Environmental Plan 2013, cll 1.2, 5.10, 6.1, 6.2; State Environmental Planning Policy (Biodiversity and Conservation) 2021, Pt 6.3, s 6.65, Ch 10; State Environmental Planning Policy (Resilience and Hazards) 2021, s 4.6; State Environmental Planning Policy (Transport and Infrastructure) 2021, s 2.143; Sydney Regional Environmental Plan (Sydney Harbour Catchment) 2005; Uniform Civil Procedure Rules 2005, r 31.27.


Strata Schemes Management Amendment Regulation 2024 (2024-9) – LW 19 January 2024

Environmental Planning Instruments
Bathurst Regional Local Environmental Plan 2014 (Amendment No 23) (2024 EPI 17) – LW 2 February 2024
Queanbeyan-Palerang Regional Local Environmental Plan 2022 (Amendment 4) (2024 EPI 3) – LW 12 January 2024

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Brandon Thai, Caitlyn Trussell

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