NSW apartments: New defects insurance scheme to protect off the plan buyers

Dodgy developers and bad builders who construct shoddy apartment towers that can lead to heartbreak and financial ruin for home-buyers are set to be driven out of NSW with a ground-breaking new defects insurance scheme.

In a landmark move by the NSW government, off-the-plan apartment buyers will be offered 10-year insurance against defects in their building and phoenixing developers for the first time in nearly 20 years.

“This is part of a really important journey,” said Gary Dransfield, the past president of the Insurance Council of Australia, who’s just been named the chair of the ministerial advisory panel to hammer out the details of the new system.

“As an interested bystander of the difficulties of the apartment market, I wondered whether the whole program could ever exist. But the government has brought it in and is really committed to this final plank of the program of reforms they have been rolling out through the work of the building commissioner.”

This latest initiative follows years of scandals over buildings like the sinking Mascot Towers near Sydney Airport, the cracking Opal Tower at Sydney Olympic Park, more than 240 apartment blocks with combustible cladding and seemingly new rectification and stop-work orders against developers every week.

Two years ago, building commissioner David Chandler was appointed with unprecedented powers to halt the slide in construction standards in the new apartment industry. His high-profile work has seen developers, building companies and certifiers who carry out defective work slowly being squeezed out.

As the final nail in their coffin, developers will be either invited or ordered – it hasn’t yet been decided – to take out the new decennial liability insurance (DLI) for their towers.