On 26 June 2026, the Building Commission NSW announced amendments to several building regulations, which defer a number of reforms due to commence on 1 July 2026, including:
- the expansion of the Design and Building Practitioners Act 2020 (NSW) (D&BP Act) to remedial work on class 3 and 9c buildings, which has been deferred until 1 July 2028;
- the exemption for building practitioners to have professional indemnity insurance, which has been extended to 30 June 2027; and
- the increase in the strata building bond under the Strata Schemes Management Act 2015 (NSW) (SSM Act) from 2% to 3% of the contract price, which has been deferred until 1 July 2028.
What does this mean for construction businesses?
D&BP Act – Deferral of application to remedial work on class 3 and 9c buildings
The registration and compliance obligations under D&BP Act and the Design and Building Practitioners Regulations 2021 (NSW) (D&BP Regulations) (together the D&BP Legislation) currently apply to all class 2 buildings (including remedial work on class 2 buildings) and certain class 3 and 9c buildings, including mixed-use developments containing a class 2, 3 or 9c component. The registration and compliance obligations under the D&BP Legislation do not currently apply where there is an emergency, or where another exclusion under the D&BP Legislation applies, which currently includes repair and remedial work on class 3 and 9c buildings (see clause 13(1)(n) of the D&BP Regulations).
Subject to any further deferrals, from 1 July 2028, the registration and compliance obligations of the D&BP Legislation will extend to apply to repair and remedial work on class 3 and 9c buildings, including mixed-use developments with a class 3 or 9c component. Repair and remedial work includes the making of alterations or additions to a building and the repair, renovation or protective treatment of a building.
It is important to note that this deferral does not apply to the statutory duty of care to exercise reasonable care to avoid economic loss caused by defects, which is owed by anyone carrying out construction work on all classes of buildings(see section 37 of the D&BP Act).
D&BP Act – Deferral of professional indemnity insurance exemption
Under the current regime, registered building practitioner’s are exempt from the requirement to hold professional indemnity insurance under the D&BP Act insurance until 30 June 2027(see clause 106 of the D&BP Regulations).
In introducing the exemption, the Government recognised that there were insufficient products available in the market to adequately cover building compliance declarations made by building practitioners. The exemption therefore provided time for the insurance market to develop while preserving the Government’s ability to impose insurance requirements to further protect consumers. By extending the exemption by a further 12 months, the Government has acknowledged the ongoing challenges faced by building practitioners in organising and obtaining suitable professional indemnity insurance.
SSM Act – Deferral of strata building bond rate increase
Under the SSM Act, developers of a strata scheme must pay security, known as a building bond, before an occupation certificate is issued pursuant to the Environmental Planning and Assessment Act 1979 (NSW), for any part of the building for which the building work was done. The developer must lodge this bond to the secretary, so that this money may be used to rectify defects identified in the Strata Building Bond and Inspection Scheme inspections.
The increase to the strata building bond rate from 2% to 3% of the contract price has also been deferred until 1 July 2028. The purpose of increasing the bond quantum is to improve confidence in the NSW construction industry.[1]
Practical implications and next steps
Clients should use this time to prepare rather than delay compliance planning. For many clients that means:
- reviewing current and planned projects for remedial or repair works on class 3 and 9c to confirm whether the deferral of the reforms affect the approval, design, registration or lodgement pathway;
- continuing to develop internal systems, design documentation processes and consultant engagement arrangements to facilitate future compliance with the D&BP Legislation;
- assessing the different professional indemnity insurance policies available and the coverage most appropriate for your business;
- reviewing and updating contracts, including any provisions relating to or in connection with the strata building bonds; and
- taking into consideration the increase in the value of the bond when carrying out your feasibility on your projects.
If you would like assistance in preparing for the upcoming changes or project specific advice, please get in touch with our Construction and Infrastructure team.
[1] Building Commission NSW, Strata Building Bond and Inspection Scheme (Web Page) <https://www.nsw.gov.au/housing-and-construction/building/strata-building-bond-and-inspections-scheme>.