NSW apartment owners are a step closer to decade-long protection against serious building defects, after Parliament passed the final law needed to bring a new class of insurance to market.

The Fair Trading and Building Legislation Amendment Bill 2026 amends 22 Acts across the Better Regulation, Fair Trading, and Building portfolios. Its centrepiece is a new definition of a ‘relevant defect’ inserted into the Strata Schemes Management Act 2015, giving insurers the clarity they need to build products that qualify as decennial liability insurance (DLI) under NSW law.

DLI covers serious defects in apartments for up to ten years from first occupation, across critical building elements including structure, facades, fire safety, and waterproofing. That matters because strata apartment buildings of four storeys or more sit outside NSW’s Home Building Compensation Cover scheme, leaving owners exposed to the kind of costly defect disputes that have made headlines for years.

The concept has been in the pipeline since 2020. An initial regulatory framework arrived with the Building and Other Fair Trading Legislation Amendment Act 2022, which let developers offer DLI as an alternative to the strata building bond. No compliant product followed. A latent defect insurance offering from Resilience Insurance was withdrawn as an accepted alternative in 2024 after the NSW Building Commission found its policy wording didn’t meet the strict legal definition. The new definition inserted by this bill is designed to stop that kind of mismatch happening again.

NSW Building Commissioner James Sherrard said the Commission is working directly with insurers, and that the bill’s passage allows it to begin final assessments of new products before they go to market. Minister for Better Regulation and Building Anoulack Chanthivong said the law would be a national first, adding that developers across the state had already signalled interest in taking up a DLI policy for prospective buyers.

The bill also tightens regulation elsewhere in the building supply chain. NSW Fair Trading gets broader powers to refuse or cancel licences obtained through misrepresentation or invalid qualifications, and to block people with a misconduct history from entering the conveyancing industry. Private certifiers caught doing the wrong thing won’t be able to surrender their registration to dodge disciplinary action.

For builders and developers on apartment projects, the practical question is when compliant DLI products will actually appear. The Commissioner’s office is the one to watch as product assessments get underway.

Frequently asked questions

What does decennial liability insurance actually cover?

DLI covers serious defects in apartments for up to ten years from first occupation. It applies to critical building elements including structure, facades, fire safety, and waterproofing.

Why aren’t apartment owners already covered by NSW’s Home Building Compensation Cover?

Strata apartment buildings of four storeys or more sit outside the Home Building Compensation Cover scheme, leaving owners without that safety net.

When will DLI products actually be available to buy?

The NSW Building Commission has begun final assessments of new products following the bill’s passage. No release date has been announced; the Commissioner’s office is the place to watch for updates.

What happened to the Resilience Insurance product?

Resilience Insurance’s latent defect offering was withdrawn as an accepted alternative in 2024 after the NSW Building Commission found its policy wording didn’t meet the strict legal definition. The new bill inserts a clearer definition to prevent the same issue recurring.

Sourced from Sourceable, NSW Parliament. Original article.