A new Sydney apartment balcony that leaks: get it into the bond inspection at 15 to 18 months

Which buildings carry a bond

NSW guidance on strata repairs says defects in residential buildings four storeys or higher and built within the last two years can be fixed with money from a building bond paid by the developer. The Strata Building Bond and Inspections Scheme applies where the building contract was entered into from 1 January 2018. It does not apply where home building compensation cover is required, and the scheme's glossary gives new low-rise multi-unit buildings of three storeys or less as the example.

The developer lodges the bond before the occupation certificate is issued. It is 2% of the contract price, and the NSW Government has deferred an increase to 3% until 1 July 2028. If the inspections find no defects, the bond goes back to the developer.

Two inspections, and why the first one matters

The developer must appoint a building inspector within 12 months of the work being finished. The interim inspection falls 15 to 18 months after the occupation certificate and cannot happen earlier. The final inspection follows at 21 to 24 months. Once the interim report is approved, the owners corporation must tell lot owners how to get a copy.

The rule that matters most for a balcony is on the scheme's own page: the final report cannot contain defective building work that the interim report did not record, unless it came from the repairs. Inspectors work by visual inspection and may not use destructive testing. A balcony that leaks only after sustained rain can look sound on a dry inspection day, so a lot owner who has seen water come through should give the owners corporation dated photographs and a note of where it appeared well before the interim inspection.

Access to your unit and balcony

An inspector who needs to enter a lot or common property must give at least 14 days written notice to the owners corporation and any lot owner or occupier, and the scheme's own example is a unit and balcony. A builder coming to fix defects must give the same notice, and once it has been given an owner cannot unreasonably refuse access. The builder does not have to wait for a report: rectification can start at any time after the work is completed.

What the bond pays, and what comes after it

The bond pays for the rectification identified in the final report, and the payment process should be completed between 2 and 3 years after the building work was finished. The owners corporation then completes the work, and any balance is returned to the developer.

A balcony leak found after the bond window is not necessarily without a remedy. The same NSW guidance says defects in residential buildings built within the last six years may be covered by a statutory warranty period, and that owners corporations with buildings up to ten years old that have serious defects in the common property should lodge them with the Building Commission NSW.