The Strata Building Bond Inspection Scheme (SBBIS) is relevant to residential or mixed-use strata schemes of 4 storeys or more for building works of contracts that were entered into from 1 January 2018. A building bond lodged by the developer may be used after 2 years from lodgement to pay for identified rectification works if the developer has failed to rectify these defects.
This guide aims to simplify the SBBIS stages; give clarity on timelines (references are from the date of Occupation Certificate); flag the important aspects such as the OCs need to enable full and proper inspections to be completed within the small window of 3 months. At the time of writing this Guide, no strata scheme has progressed past Stage 3.
Please note that the SBBI Scheme is not relevant to schemes of 3 storeys or less as a remedy is available under Part 6 of the Home Building Act 1989.
STAGE 1 | BUILDING BOND LODGEMENT
- The stage is solely developer responsibility for lodgement of 2% of the contract value.
STAGE 2 | INSPECTOR APPOINTMENT | within 12 months
- The developer is responsible for the appointment of the inspector & the related costs.
- Inspector must be selected from a panel and must be agreed to by the owners corporation.
STAGE 3 | INTERIM INSPECTION & INTERIM REPORT | 15 to 18 months after completion
- The developer must give written notice of at least 14 days of the inspection.
- OC must give reasonable access, or the use of the bond might be in jeopardy.
- The inspection is visual and non-evasive testing. Secondary speciality inspectors can be involved eg HVAC.
- Developer to provide the report to the owners corporationwithin 14 days of receiving it.
- Once the report is received, the owners corporation must let all owners know within 14 days where to access it.
STAGE 4 | RECTIFY DEFECTIVE WORK | 18 to 21 months
- Responsibility of developer to liaise with the builder.
- If there is a need to enter a lot to rectify then must give 14 days’ notice to the owners corporation, developer, lot owner & lot occupier.
STAGE 5 | FINAL INSPECTION & REPORT | 21 to 24 months
- The developer must arrange for the same inspector.
- Inspector cannot raise any matters that were not raised in the 1st report.
- The final report must be in an approved form and provided to the owners corporation within 14 days of completion, no less than 24 months after Occupational Certificate.
STAGE 6 | DETERMINE COST OF RECTIFICATION | after 24 months but before 2 years & 90 days
- Developer & OC to agree to the cost and provide a deed of agreement within 30 days of the finalised report.
- If no agreement, the government will appoint a quantity surveyor to determine the cost of the defective works. The developer & OC to share the cost of the appointed quantity surveyor.
STAGE 7 | PAYING THE BUILDING BOND | 2 years from completion OR 90 days from the final report (later of 2)
- Bond to be claimed OR released between 2 and 3 years after the completion date.
- Unreasonable access refusal to the developer or builder can lead to a refusal of a claim on the bond.
- 7 different circumstances are provided to enable the bond release.
STAGE 8 | COMPLETE THE PROCESS | within 3 years
- Notifications from the OC to the developer are required to comply and penalties exist if these notifications do not happen.
This information is summarised from the NSW government’s comprehensive 48-page owners corporation information manual. This Manual includes key terms, detailed processes, and schedules, including the different written notices to be used in the 8 stages (32 forms).
If you have any questions, simply contact your Strata Plus accredited strata manager
Read moreWHAT IS STRATA
STRATA COMMITTEE
LIVING IN STRATA
BY LAWS
STRATA LEGISLATION
COMMON PROPERTY
STRATA LEVIES
SUSTAINABILITY
ENERGY EFFICIENT SCHEMES
COUNCIL INITIATIVES
REPAIRS & MAINTENANCE
INSURANCE
COMPLIANCE
RESOLVING DISPUTES AND MEDIATION
DEFECTS
ARCHIVED