Developer bond scheme opens doors to doors to better quality apartments
Opening the door to your new home should be a time of celebration – not one worrying about build quality.
Consumers currently have minimal financial protection for defective building work in apartments that are four storeys or more. And that’s why we’re introducing a new develop bond scheme to help address the cost of fixing poor building work.
Alongside strengthened quality control measures, the Building Legislation Amendment (Buyer Protections) Bill 2025 takes the first steps towards introducing a 10-year insurance product for apartment buildings.
How will the developer bond scheme work?
A developer bond works in a similar way to a rental bond.
Under the scheme, developers pay a bond to the regulator -the Building and Plumbing Commission – who holds it for approximately two years after the building is finished.
If defective work is identified, this money can be released to pay for rectification works.
The Building Legislation Amendment (Buyer Protections) Bill 2025 establishes this scheme and sets the bond rate at two per cent of the cost of constructing the building.
When will the developer bond scheme begin?
Regulations to support implementation of the developer bond scheme will be made by end of 2025. This new scheme is in line with a similar scheme operating in New South Wales.
For more information, see Building reform(opens in a new window)
Updated