New South Wales’ Parliament has passed the Fair Trading and Building Legislation Amendment Bill 2026, letting eligible developers satisfy their statutory bond obligation with an approved 10-year defect insurance policy — known in the market as Latent Defects Insurance (LDI) — instead of the existing two-year strata building bond. The bill cleared the Legislative Council with amendments on August 4, with the Legislative Assembly agreeing shortly after; it forms the final tranche of amendments from the 2021 statutory review of the Strata Schemes Management Act 2015. Under the reform, owners get 10 years of cover for major structural defects from completion, claimable directly from the insurer without first pursuing developers or builders through litigation. The law takes effect once proclaimed, expected within weeks, after which developers of Class 2 residential apartment buildings can use an approved decennial policy in place of the bond.
NSW is the third Australian jurisdiction to legislate decennial cover, after the ACT (legislated 2024, in effect since late 2025) and Victoria (passed June 17); together the three cover most of the national apartment market. Western Australia is considering decennial cover as a later-stage reform, and Queensland is examining it ahead of the 2032 Olympics development pipeline.
Corey Nugent, chief executive of Resilience Insurance — which has provided the cover in NSW since 2022 — credited the NSW Government for “replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into,” and said thousands of NSW apartments already carry the insurance from developers who adopted it early.
References
Apartments.com.au — NSW parliament passes 10-year defect insurance laws for new apartment buyers
