30 Nov Developers will have to lodge a building defect bond from 1st July 2017

Posted at 00:06h in Building Bonds, News by

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

 

Surety Bonds are not limit to developers and can are typically used in construction, building, engineering, mining, and services industries.

For more information on Surety Bonds, please contact CRM Brokers on 1300 880 494 or visit our Surety Bonds web page

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