Strata Building Bond and Inspection Scheme NSW
Archi-QS provides professional support across the Strata Building Bond and Inspection Scheme (SBBIS) – including building bond assessment, defect identification and reporting, and rectification cost assessment for applicable NSW strata developments.
Quick answer
What is the Strata Building Bond and Inspection Scheme?
The Strata Building Bond and Inspection Scheme (SBBIS) is a NSW scheme that requires developers of applicable strata buildings to lodge a building bond and have the completed building independently inspected. An appointed building inspector carries out an interim and a final inspection, identifies defective building work, and reports on it. The bond is available to fund rectification of defects that are not resolved.
Archi-QS is a quantity surveying and building consultancy practice that supports developers, builders, owners corporations and strata professionals through the SBBIS process — from building bond assessment through to defect and rectification cost assessment.
The scheme
Why was SBBIS introduced, and how does it work?
SBBIS stands for the Strata Building Bond and Inspection Scheme. It was introduced in NSW to give owners of newly constructed strata buildings a structured, independent way of having defective building work identified and addressed shortly after completion — rather than relying solely on dispute processes later on.
The scheme works through two connected mechanisms. The building bond is a financial security lodged by the developer before an occupation certificate is applied for. The inspection process requires an independent building inspector to examine the completed building, identify defective building work, and report on it at two defined points in time.
Independent inspection matters because defects are far easier and cheaper to resolve while the builder is still engaged and the bond is still in place. It also gives the owners corporation an objective, documented record of the building’s condition rather than a contested opinion.
Stakeholders typically involved include the developer, the builder, the appointed building inspector, the owners corporation, the strata manager, and cost professionals such as a quantity surveyor.
Applicability
Who does the Strata Building Bond and Inspection Scheme apply to?
SBBIS applies to certain new strata developments in NSW — not to every strata scheme. Whether the scheme applies depends on the type of building, its scale, when the building work contract was entered into, and whether other statutory protections already cover the work.
Residential and mixed-use strata
The scheme is directed at new strata buildings that contain residential lots, including mixed-use buildings with commercial or retail space and shared areas such as car parks.
Four or more storeys
SBBIS applies to strata buildings of four or more storeys. These fall outside the Home Building Compensation Fund, which covers lower-rise residential construction. Where HBCF applies to the work, SBBIS generally doesn’t.
Contracts from 1 January 2018
The scheme applies where the building work contract was entered into on or after 1 January 2018. Applicability should be confirmed for each project.
Applicability is determined by the Strata Schemes Management Act 2015 and its regulations, and the requirements have been amended over time. Archi-QS recommends confirming applicability for your specific development before relying on any general summary.
Not sure if SBBIS applies to your project?
Talk to Archi-QS. We can review your development details and help you understand what the scheme means for your project programme and budget.
Building bond
What is the SBBIS building bond?
The building bond is a financial security that the developer must provide for an applicable strata building. It is not a general construction warranty and it is not insurance. It is a defined amount held so that funds are available if defective building work identified through the scheme is not rectified.
The bond is currently 2% of the contract price for the building work. The NSW Government has deferred a planned increase to 3% until 1 July 2028. Where there is no single contract price, or where the contract price does not reflect the true cost of the work, the value of the building work generally needs to be assessed — which is where quantity surveying input is commonly required.
The developer is responsible for arranging and lodging the bond, and it must be in place before an application for an occupation certificate is made. The bond is lodged through the NSW Planning Portal. From stage 2 onwards, including the inspector appointment, reports and bond release, the case is managed through the Strata Hub.
The bond remains available through the inspection period. If the final report identifies defective building work that has not been rectified, the bond may be applied to the cost of that rectification. Any balance is returned to the developer once the process is complete.
Bond amount
2%
of the contract price for the building work. A planned increase to 3% has been deferred until 1 July 2028.
- Arranged and lodged by the developer
- Lodged before applying for an occupation certificate
- Registered through the NSW Planning Portal
- Held as security for defect rectification
The building inspector
How is the building inspector appointed?
The developer appoints the building inspector, with the approval of the owners corporation. The appointment must be made within 12 months from the occupation certificate being issued. If the developer does not make an appointment within that period, the Secretary may arrange an inspector, with the associated cost charged to the developer.
The inspector must be independent of the developer and the builder, must not be a connected person, and must be drawn from the approved strata inspector panel. Choosing an appropriately qualified professional matters: the inspector’s reports drive what is classified as defective building work, what must be rectified, and ultimately how the building bond is dealt with.
Independence
The developer and the building inspector cannot be connected persons. Disclosures are required to demonstrate that the inspector is genuinely independent of the parties involved.
Inspection
The inspector examines the completed building work to identify defective building work at both the interim and the final inspection stages.
Reporting
Each inspection is supported by a written report that records what was inspected, what was found, and what is classified as defective building work.
Compliance
Inspectors must be appropriately qualified and drawn from the approved strata inspector panel, and the appointment itself must meet the statutory requirements.
Archi-QS provides quantity surveying, defect assessment and rectification cost assessment services in connection with SBBIS. Where a statutory building inspector appointment is required, Archi-QS can discuss the appointment requirements with you and confirm the appropriate scope for your project.
The process
How does the SBBIS process work?
The NSW Government sets out the scheme in eight stages, beginning before the occupation certificate is issued and continuing for around two to three years after completion.
Building bond lodgement
The developer registers the project and lodges the building bond through the NSW Planning Portal, together with the supporting documentation for the contract price.
Before occupation certificate
Building inspector appointment
The developer appoints an independent building inspector through the Strata Hub, with the approval of the owners corporation. If no appointment is made, the Secretary may arrange one.
Within 12 months FROM OC
Interim inspection and report
The inspector inspects the completed building work, identifies defective building work and issues the interim report to the parties.
15–18 months after completion
Rectifying defective building work
The builder or developer rectifies the defective building work identified in the interim report before the final inspection takes place.
Approx. 18–21 months
Final inspection and report
The inspector re-inspects, reviews whether the interim defects have been rectified, and issues the final report recording any outstanding defective building work.
21–24 months after completion
Determining rectification cost
Where defective building work remains, the cost of rectification is agreed between the parties or determined through the process set out in the scheme.
After final report
Paying the building bond
The building bond is applied to the agreed or determined rectification cost so the outstanding defective building work can be funded.
Approx. 2–3 years after completion
Completion and bond balance
Rectification work is completed and any remaining balance of the building bond is returned to the developer, closing out the process.
Process complete
SBBIS process at a glance
| Stage | What happens | Who is involved | Outcome |
|---|---|---|---|
| 1. Building bond lodgement | Project registered and bond lodged via the NSW Planning Portal with supporting contract price documentation. | Developer | Bond secured before OC |
| 2. Inspector appointment | Independent building inspector appointed through the Strata Hub with owners corporation approval. | Developer / owners corporation | Inspector engaged |
| 3. Interim inspection & report | Building inspected and defective building work identified and documented. | Building inspector | Interim report issued |
| 4. Rectification | Defective building work identified in the interim report is rectified. | Builder / developer | Defects addressed |
| 5. Final inspection & report | Re-inspection, review of earlier defects and reporting on outstanding items. | Building inspector | Final report issued |
| 6. Rectification cost | Cost of outstanding defective building work agreed or determined. | Parties / cost professionals | Rectification cost set |
| 7. Bond payment | Building bond applied towards the rectification cost. | Owners corporation / Building Commission NSW | Funds released |
| 8. Completion | Rectification completed and any bond balance returned. | All parties | Process closed |
Timeframes shown are the indicative statutory windows under the scheme. The statutory windows run from completion of the building work or from the issue of the occupation certificate, depending on the stage. The exact dates that apply to a project depend on the date of completion of the building work and the circumstances of the development.
Documentation
What is involved in a building bond report?
Before the building bond can be lodged, the contract price for the building work has to be established and supported by documentation. Where the contract price is not straightforward — multiple contracts, staged works, variations, developer-managed construction or mixed-use components — an independent assessment of the building work value is generally required.
Information typically required
- Building contracts and any variations
- Development consent and approved drawings
- Schedule of works and construction staging
- Cost breakdown across residential, commercial and common areas
- Project and consultant details for the development
- As-built architectural plans and specification
What the report provides
A clear statement of the assessed value of the building work, the basis and methodology used, the resulting bond amount, and documentation in a form suitable to accompany the lodgement. It gives the developer a defensible position on the bond figure rather than an unsupported estimate.
Interim stage
What happens during the interim inspection?
The interim inspection is the first formal inspection under the scheme. It takes place between 15 and 18 months after completion of the building work, which is late enough for many defects to have become apparent but early enough for them to be rectified while the bond is still in place.
1. Inspect
The inspector attends the building between 15 and 18 months after completion of the building work. They inspect the common property, lot property and relevant building elements.
2. Identify defects
Building work that does not meet the applicable standards is identified and classified as defective building work.
3. Document
Findings are recorded with location, description and supporting evidence so each item can be traced and re-checked at the final inspection.
4. Report
The interim report is issued to the developer, the builder, the owners corporation and Building Commission NSW, setting out the defective building work identified.
Once the interim report is issued, the builder or developer has the opportunity to rectify the defective building work before the final inspection. This is the stage where a clear, well-evidenced report has the most practical value — it defines exactly what needs to be addressed and reduces argument later in the process.
Final stage
What happens during the final inspection?
The final inspection takes place between 21 and 24 months after completion of the building work. It has a narrower purpose than the interim inspection: the inspector reviews whether the defective building work identified in the interim report has been rectified, and identifies any defective building work arising from the rectification work. The final report cannot include new defects that were not identified in the interim report.
Each item from the interim report is revisited and recorded as rectified or outstanding. The final report documents the position and is issued to the parties and Building Commission NSW.
Where defective building work remains outstanding in the final report, the process moves to determining the cost of rectification. That cost is either agreed between the parties or determined under the scheme, and the building bond may then be applied towards it.
The final report records
- Interim defects that have been rectified
- Interim defects still outstanding
- Defective building work arising from rectification
- The basis for each classification
- The position from which rectification cost is determined
Defects
How are building defects identified and rectified?
Defective building work is identified by the building inspector and documented in the interim and final reports. Rectification is the responsibility of the builder or developer — not the inspector and not the cost consultant.
The inspector finds defective work
Each item is recorded in the report
The scope of each defect is assessed
The builder or developer fixes it
The final inspection checks the work
The final report records the outcome
Documented
Each item is described, located and evidenced in the report so it can be actioned and re-checked at the next inspection stage.
Rectified
The builder or developer carries out the rectification work. Archi-QS does not physically rectify defects; our role is assessment, cost and reporting.
Costed
Where items remain outstanding, the cost of rectification is assessed so the building bond can be applied to the correct amount.
The link between defects and the bond is direct: the bond exists to fund rectification of defective building work that has not been dealt with by the end of the process. Where defects are not adequately addressed, the bond may be applied towards the agreed or determined rectification cost, with any balance returned to the developer.
Professional roles
The role of a quantity surveyor in SBBIS
The building inspector and the quantity surveyor do different jobs. The inspector is appointed under the scheme to carry out the interim and final inspections and to report on defective building work. The quantity surveyor isn’t a statutory role. Developers and owners corporations engage one for cost expertise wherever the process depends on value or cost.
Where cost expertise applies
For developers
- Substantiating the building work contract price that sets the bond
For owners corporations
- Costing defects identified in the inspector’s reports
- Reviewing rectification costs proposed by the developer or builder
- Supporting claims against the bond
Our services
How can Archi-QS help with SBBIS?
Archi-QS combines quantity surveying, building consultancy and strata experience. For SBBIS, that means we can support the parts of the process that depend on accurate assessment of building work, defects and cost — and help you stay ahead of the scheme’s deadlines.
SBBIS advisory support
Practical guidance on how the scheme applies to your development, what’s required at each stage, and what needs to be in place before an occupation certificate is applied for.
Contract price substantiation
Independent substantiation of the building work contract price that sets the bond, with the methodology and supporting documentation set out clearly.
Interim and final inspections
Inspection of completed building work and clear, evidenced reports on defective building work: what was found, where it was found and why it’s classified as defective.
Rectification cost assessment
Independent assessment of the cost of rectifying identified defects, and review of rectification costs proposed by other parties.
Bond claims and release
Support for owners corporations claiming against the bond, and for developers seeking its release once defects are resolved.
Where we have assessed the building bond for a development, we cannot act as the building inspector on the same project. We will confirm this with you at the outset.
Related services: Strata Services • Building Consultancy & Cost Planning • Building Condition Reports • Dilapidation Reports
Why Archi-QS
Why choose Archi-QS for SBBIS?
SBBIS sits at the intersection of building inspection, defect assessment and construction cost. Archi-QS works across all three, which means the technical findings and the cost position are prepared with the same understanding of the project.
Quantity surveying expertise
Construction cost assessment is core to what we do, which is directly relevant to bond value and rectification cost.
Strata and building consultancy
Ongoing work across NSW strata schemes, from capital works planning through to condition and defect reporting.
NSW regulatory understanding
Familiarity with the NSW strata framework and the obligations that apply to applicable developments.
Structured reporting
Consistent inspection and reporting methodology, so findings are clear, evidenced and usable by all parties.
Practical issues
Common SBBIS mistakes developers make
Most SBBIS problems are process problems rather than construction problems. These are the issues we see most often, and each one is straightforward to avoid with the right input early.
Appointing the inspector late
The developer nominates the building inspector, but the owners corporation has to approve the nomination within 12 months from the occupation certificate date. Leave it late and the Secretary can appoint an inspector, with the cost charged to the developer.
Not acting on owner feedback
Once owners move in, they start reporting defects. Leaving these until the interim inspection means small items become formal defects in the inspector’s report.
Not keeping a list of outstanding defects
Developers who compile and track their own list of outstanding defects stay ahead of the inspection process. Without one, the inspector’s report becomes the first complete picture of the building’s condition.
Not coordinating with the builder
Rectification works go faster when the developer and builder work together. Changing the builder’s program part-way through, or leaving rectification uncoordinated, delays the works and risks defects still being open at the final inspection.
Not providing the Initial Maintenance Schedule
The Initial Maintenance Schedule (IMS) should go to the owners corporation early, so common property is maintained from day one. Without it, maintenance lapses can cause deterioration that’s hard to separate from defective building work. Doing this is part of the developer’s own due diligence.
Not acting on the interim report
The interim report gives the developer a window to fix identified defects before the final inspection. Defects still outstanding at the final report can be claimed against the bond, at a cost the developer no longer controls.
FAQ
Frequently asked questions
Direct answers to the questions developers, builders and strata professionals ask most often about the Strata Building Bond and Inspection Scheme.
What is the Strata Building Bond and Inspection Scheme?
The Strata Building Bond and Inspection Scheme (SBBIS) is a NSW scheme requiring developers of applicable strata buildings to lodge a building bond and have the completed building independently inspected. An appointed building inspector carries out an interim and a final inspection and reports on defective building work. The bond is available to fund rectification of defects that are not resolved.
Who does SBBIS apply to?
SBBIS applies to certain new strata developments in NSW — not to every strata scheme. It is directed at taller residential and mixed-use strata buildings that sit outside the home building compensation arrangements covering lower-rise construction. Applicability depends on the building, its scale and when the building work contract was entered into, so it should be confirmed for each project.
How much is the SBBIS building bond?
The building bond is currently 2% of the contract price for the building work. The NSW Government has deferred a planned increase to 3% until 1 July 2028. Where the developer is also the builder, or is related to the builder, there’s no arm’s length contract price. In that case a quantity surveyor assesses the value of the building work, and the bond is set from that assessment.
Who appoints the building inspector?
The developer appoints the building inspector, with the approval of the owners corporation. The inspector must be independent, must not be a connected person of the developer or builder, and must be drawn from the approved strata inspector panel. If the developer does not appoint one, the Secretary may arrange an inspector at the developer’s cost.
When is the building inspector appointed?
The appointment must be made within 12 months of the occupation certificate being issued. It’s best to nominate an inspector early, so the owners corporation has time to meet and vote on the nomination within that period.
What happens during the interim inspection?
The interim inspection takes place between 15 and 18 months after completion of the building work. The inspector inspects both common property and lot property, identifies defective building work and issues the interim report to the parties. The builder or developer then has the opportunity to rectify the identified defects before the final inspection.
What happens during the final inspection?
The final inspection takes place between 21 and 24 months after completion of the building
work. The inspector checks whether the defects identified in the interim report have been
rectified, and whether the rectification works themselves have caused any defective building
work. The final inspection doesn’t look for new defects. The inspector then issues the final
report, and any defects still outstanding can be claimed against the bond.
How are defects dealt with under SBBIS?
The building inspector identifies and documents defective building work, and the developer is
responsible for rectifying it. The final inspection checks the defects from the interim report
again. Where defects remain outstanding, the cost of rectification is assessed and claimed
against the building bond.
How long does the SBBIS process take?
The full process typically runs for around two to three years. It begins before the occupation certificate is issued with lodgement of the bond, and concludes once rectification costs are resolved and any remaining bond balance is returned to the developer.
What happens to the building bond?
If no defective building work remains outstanding at the end of the process, the bond is returned to the developer. If defects are outstanding, the bond may be applied towards the agreed or determined rectification cost, with any balance then returned to the developer.
What is the role of a quantity surveyor in SBBIS?
A quantity surveyor provides construction cost expertise at two points in the scheme. Where the developer and builder are the same or related parties, the QS assesses the value of the building work that sets the bond. After the final inspection, the QS assesses the cost of rectifying any outstanding defects, and that assessment supports the rectification cost agreed between the parties or determined under the scheme.
Can Archi-QS provide SBBIS services?
Yes. Archi-QS provides SBBIS advisory support, building bond valuation, interim and final inspections, rectification cost assessment, and support with bond claims and release. Where we have assessed the building bond for a development, we cannot act as the building inspector on the same project. We will confirm this with you at the outset. Contact us to discuss your development and confirm the right scope for your project.
Need help with the Strata Building Bond and Inspection Scheme?
Speak with Archi-QS about your SBBIS, building inspection, defect assessment or cost assessment requirements. We can talk through your development, help you confirm whether the scheme applies, and arrange the right professional service for the stage you are at.