New Apartment Buying Resources & Consumer Rights DECENNIAL INSURANCE

THE 10-YEAR LIABILITY SCHEME FOR NEW STRATA APARTMENTS

Decennial Liability Insurance (DLI) is an NSW scheme designed to provide long-term protection against serious defects affecting critical structural elements in qualifying apartment buildings over three storeys.

1. Why is DLI Relevant to a New Strata Building?

DLI provides protection for up to 10 years and operates on a first-resort, strict-liability basis. This means an owners corporation does not have to establish that the developer or builder was at fault before making a claim.

Because the policy is legally attached to the building itself, protection for the strata owners remains fully active even if the original building entity or development company goes insolvent or ceases trading.

2. How does DLI differ from the Strata Building Bond (SBB)?

While the Strata Building Bond requires developers to lodge a 2% financial security bank bond to catch early defects, DLI is a comprehensive insurance policy providing much longer-term protection. Under current NSW guidelines, developers can choose DLI as an alternative pathway to the SBB. *Note: The planned statutory increase of the SBB from 2% to 3% has been officially deferred until 1 July 2028.

Feature Strata Building Bond (SBB) Decennial Insurance (DLI)
Nature Statutory Bank Security / Bond 10-Year Insurance Policy
Fault Basis Statutory inspection & claim process Strict-Liability / First-Resort
Insolvency Limited to value of cash bond Full insurer backing if trader closes

3. Independent Insurer Risk Assessments

A key advantage of the DLI framework is active underwriting intervention. Insurers run exhaustive technical checks, engineering site checks, and building history reviews *during* the active construction phase to minimize risk before backing the asset. This creates a strong commercial incentive for builders to maintain flawless standards.

To review official consumer protection pathways or verify developer scheme criteria, visit the NSW Government Strata Portal.

Inheriting serious structural defects or waterproofing failures can devalue an apartment overnight.
Contact our business owners for a comprehensive review of the contract, and to protect your interests before proceeding with the purchase of an apartment in a newly constructed strata scheme.

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