Discover the role of a quantity surveyor in Sydney and their importance in accurate cost reporting for the Strata Building Bond & Inspections Scheme.
Recent legislation in the state of New South Wales dictates that developers constructing a new apartment building that meets or exceeds four stories must pay a ‘strata bond’ to NSW Fair Trading during the construction process. A registered quantity surveyor is mandated to prepare a comprehensive strata bond cost report, to ensure that the new regulation is being upheld. The expertise of a qualified quantity surveyor is essential in accurately assessing the construction expenses, ensuring compliance with the strata bond requirements, and facilitating a smooth process for developers. By engaging a trusted quantity surveyor in Sydney, developers can effectively navigate the complexities of strata bond regulations and fulfill their obligations with confidence.
What are strata bonds?
Strata bonds, also known as building bonds or maintenance bonds, are financial instruments used in the strata and apartment sectors. They serve as a form of security or guarantee to ensure the completion of building works and the rectification of any defects in common property areas. In Australia, specifically in New South Wales, strata bonds are legally required for developers undertaking strata developments. This bond is calculated as either 2% of the total building cost or 2% of the overall construction expenditure, and it is held by NSW Fair Trading, a government agency responsible for administering strata laws. If the developer fails to complete the required works or address any defects, the strata corporation can make a claim against the bond to cover the costs of rectification. Strata bonds provide assurance to owners and promote the timely completion and quality of strata developments, ultimately protecting the interests of all stakeholders involved.
Strata Building Bond & Inspections Scheme (SBBIS)
The Strata Building Bond & Inspections Scheme was introduced in NSW to uphold regulatory standards and ensure the quality of developments. This scheme serves as a safeguard against unscrupulous developers who may compromise construction quality for cost-saving purposes. One of the key components of this scheme is the involvement of an independent, developer-appointed inspector who conducts thorough inspections to certify that the building is free from defects during a three-year timeframe after the construction of the building has been completed.
The scheme is divided into 8 stages:
Image sourced from Fair Trading NSW
Utilising the Strata Bond:
During the inspection phases of the Strata Building Bond & Inspections Scheme, any identified defective work must be rectified, and the associated costs are covered by the strata bond. This mechanism ensures that developers are held accountable for the quality of their construction during the three-year timeframe after the building project has been completed, whilst also acknowledging that some wear and tear will occur in the decades after the building’s construction. After the SBBIS period, if there are remaining funds after the completion of the scheme, they are returned to the developer. This process not only incentivises developers to prioritise construction quality but also safeguards the interests of stakeholders.
The Role of a Quantity Surveyor in Sydney:
To guarantee precision and adherence to the scheme’s requirements, it is mandatory to engage a registered quantity surveyor for the preparation of a comprehensive strata bond cost report. It is imperative that the selected quantity surveyor remains independent, with no affiliations to the developer, banks, or financiers. Moreover, they must hold registration with either the Australian Institute of Quantity Surveyors or the Royal Institution of Chartered Surveyors. The strata bond cost report should encompass a meticulous breakdown of all relevant work conducted under the contract, accompanied by a certificate affirming that the quantity surveyor has conducted a meticulous inspection of the as-built drawings and specifications relating to the outlined strata plans. This report should be submitted before Stage 1 of the SBBIS to ensure that all cost estimates are an accurate reflection of the construction phase. Having an independent quantity surveyor writing the report ensures that the costs are accurately calculated – a dodgy developer is not underpaying, nor is an honest developer overpaying for the bond.
Are you looking for a reputable quantity surveyor in Sydney for strata bond cost report writing?
Navigating the complexities of the Strata Building Bond & Inspections Scheme demands the expertise and guidance of a reputable quantity surveyor in Sydney. By enlisting the services of a professional quantity surveyor, you can ensure accurate cost reporting and adherence to the scheme’s requirements. At Section 94, our team of experienced and highly qualified registered quantity surveyors in Sydney can assist with writing strata bond cost reports, mitigating any potential challenges, and ensuring compliance every step of the way. Additionally, our expert team can assist with many other reports and challenges of the building development process, including Section 94/ DA Reports, Bank Prefunding reports, Construction budgets, progress claims, and more! Do not hesitate to reach out to one of our trusted quantity surveyors in Sydney today to receive expert assistance.
With over a decade of industry experience, our qualified building quantity surveyors are AIQS certified with a fast turnaround time and clear communication. Give us a call today at 0413 953 869 or email us at info@section94.com.au to discuss our quality budget services for residential and commercial builds.