Developers are required to submit a building bond to NSW Fair trading equal to 2% of the building contract price. The building bond must be lodged before the occupation certificate is issued. The building bond secures funds (up to the amount of the bond) to be used to pay for any defective building work that’s identified in a final inspection report.
The owner’s corporation must notify the developer or builder of a potential defect as soon as it becomes aware of it.
For more information on about the scheme and the home building compensation fund https://www.fairtrading.nsw.gov.au/housing-and-property/strata-building-bond-and-inspections-scheme