30 Nov Developers will have to lodge a building defect bond from 1st July 2017
Developers will have to lodge a building defect bond from 1st July 2017
The new building defect bond scheme will apply to contracts for the construction of strata buildings over three storeys high, entered into after 1st of July, 2017. Changes coming into effect include:
- mandatory defect inspection reports and maintenance schedule.
- a building defect bond as a form of security to fix any defective work.
The aim is to promote efficient maintenance and monitoring of defects, as well as the prompt attention to defects by builders and developers to recover the bond amount. Developers will need to lodge a bond worth 2% of the building’s contract price with Fair Trading.
Since 1999, CRM Brokers have been providing developers with an efficient and cost-effective way to satisfy financial guarantee requirements under contract through unsecured Surety Bonds.
Whilst complying with the new legislation, Surety Bonds provide the added advantages of;
Improving your balance sheet and liquidity
Unsecured; no tangible asset or collateral required
Works alongside your existing bank facilities
Risk mitigation; less-exposed to bank credit decisions or reviews
This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.
Information is current as at the date the article is written as specified within it but is subject to change. CRM Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of CRM Brokers.