There are as many as fives new strata schemes established every day, according to New South Wales Fair Trading. That means as more and more people move into luxury apartment developments, we have a greater percentage of the population that needs to understand how strata works.
Fortunately, the state government has recently overhauled the entire system, with some big changes in place to benefit owners and investors. One of the most important of these is the new building bond for property developments – but how does it work?
Breaking down the building bonds
From July 1st next year, every strata development over three storeys high has to pay a building bond. Developers put down a deposit equal to 2 per cent of the total project value, which acts as security against any building work that goes awry.
During the first two years of the development's existence, an independent contractor must then be used to assess the building multiple times. They will identify any work that's sub-standard, which is then covered by this 2 per cent bond.
The owners corporation (that's you – or your strata manager) will have input on who inspects the building, and signs off on the whole deal. It sounds like a big deal, but it's really just a legislative reinforcement of good practice – something we're more than familiar with in our luxury developments.
There will also be many benefits for you.
Benefits of the legislative change
First and foremost, the building bond scheme ensures that your new apartment is in great condition, with no structural flaws to be uncovered months or years down the line. It improves accountability for developers and builders, and overall will ensure that an apartment blocks has a long, safe life span.
It will also be a process that anyone who own strata can be involved in – maintenance schedules are drawn up at the annual general meetings of the owners corporation.
While most changes to NSW strata come into play on November 30, this is a particularly large-scale one – thus the delay. However, it's part of a huge set of adjustments that make owning or renting luxury apartments all the easier and more comfortable.
At Crown Group, we specialise in luxury apartment developments of the highest quality. Our top of the line units coupled with increased assurance through legislation make looking at our projects a must for anyone who wants the best.