Building Defects

Building Defects in Strata — What Owners Need to Know

All new strata buildings in NSW are protected by statutory warranties provided by the original builder or developer. Recent NSW building reforms have strengthened oversight and improved protections for apartment owners, making it easier to identify and resolve defects early.

At Westside, we help Owners Corporations navigate the defects process with practical expertise and a clear, structured approach — protecting your building and its long-term value.

What is a building defect?

A defect may arise from:

  • Faulty design or workmanship
  • Defective materials
  • Failure to meet National Construction Code requirements

Major defects are those that affect safety, structure, or the building’s ability to be used as intended. Common examples include waterproofing failures, fire safety issues, structural cracking, and roof leaks.

Defect Liability Timeframes

The original proprietor is responsible for rectifying:

  • Minor defects: up to 2 years from occupation
  • Major defects: up to 6 years from occupation

If you’re unsure whether an issue qualifies as a defect, the NSW Guide to Standards and Tolerances provides helpful benchmarks (noting legislation and contracts always take priority).

Key Protections for Owners

Strata Building Bond & Inspections Scheme (SBBIS)

  • Strata Building Bond & Inspections Scheme (SBBIS)
  • Developer lodges a bond of 2% of the contract value (3% from July 2026)
  • Independent inspections at 15–18 months and 21–24 months
  • Bond funds can be used if defects aren’t fixed

Latent Defects Insurance (LDI)

  • Strata Building Bond & Inspections Scheme (SBBIS)
  • Strata Bond: Short-term protection (first 2 years), money held for defect repairs
  • LDI: Long-term protection (up to 10 years), direct insurance cover

Most buildings will have a strata bond; some may also have LDI in place.

What Owners Should Do

  • Check whether your building has LDI and request confirmation
  • Confirm the strata bond has been lodged with NSW Fair Trading
  • Stay involved in inspections and review reports carefully
  • Raise issues early to ensure they’re captured and addressed

 

In Summary

NSW owners now benefit from stronger protections than ever before. Early defect inspections, backed by financial safeguards and long-term insurance options, help ensure building issues are identified and fixed without owners footing the bill.

Westside can help you

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