SBBIS Made Clear: Defects, Expectations & Compliance

The Strata Building Bond and Inspections Scheme (SBBIS) was introduced to improve the quality of new Class 2 buildings across NSW — and it’s working. But for developers, it introduces an extra layer of compliance that needs to be managed carefully, particularly when it comes to defining defects and aligning stakeholder expectations.

At Waratah Consulting, our role is to act as an independent conduit between developers, Owners Corporations (OCs), and residents — ensuring compliance, protecting quality, and keeping the process on track.

The SBBIS in Practice

Under the SBBIS, developers must:

• Lodge a 2% building bond via the NSW Planning Portal

• Appoint a registered inspector (like Waratah Consulting)

• Coordinate inspections and rectify any confirmed defects

• Ensure reporting is submitted via Strata Hub within required timeframes

At the same time, the Owners Corporation is responsible for approving the inspector and confirming that rectification has been completed.

The goal is clear: identify and resolve major defects before the bond is released — reducing risk for everyone involved.

What Counts as a Defect?

SBBIS inspections don’t focus on surface-level issues. A defect under this scheme must represent a breach of statutory warranty under the Home Building Act 1989, and align with at least one of the following:

• The National Construction Code (NCC)

• Relevant Australian Standards

• Manufacturer or material warranties

Defects are classified as:

• Major – serious issues that affect safety or use of the building

• Minor – non-critical, but still non-compliant

• Non-defect – cosmetic or preference-based concerns outside the scheme’s scope

Bridging the Gap Between Stakeholders

One of the biggest challenges in the SBBIS process is managing differing expectations. Residents and OCs may interpret minor imperfections as defects, especially if they’re used to cosmetic inspections — like those during rentals or resale.

Waratah helps bridge this gap by:

• Applying Technical Standards – Assessing each item against the NCC, Australian Standards, and manufacturer warranties

• Explaining the Difference – Helping strata and residents understand why some concerns aren’t defects under the scheme

• Providing Clear Evidence – Including photographs, technical clauses, and plain-English commentary in our reports

• Encouraging Agreement – Clarifying expectations and reducing unnecessary disputes

Why It Matters for Developers

The SBBIS isn’t just a box to tick. Poor or delayed defect identification can:

• Drive up costs with last-minute rectifications

• Delay bond release and project close-out

• Strain relationships with OCs and residents

• Impact reputation with regulators and future buyers

A structured, transparent inspection process helps everyone focus on genuine issues, builds trust with the OC, and gets the project over the line — without surprises.

What Waratah Delivers

As independent, registered inspectors under the SBBIS, we support both compliance and cooperation:

• Independent Oversight – Neutral, standards-based assessment aligned with legislation

• Defect Accuracy – Early inspections that clarify what needs fixing (and what doesn’t)

• Structured Reporting – Clear interim and final reports for Strata Hub submission

• Access Coordination – Keeping site access smooth and the inspection program moving

While we’re often appointed by the developer, our statutory role is impartial. We understand the pressures around time, cost and program delivery — and the OC’s need for assurance that issues will be addressed.

By managing communication, clarifying definitions, and keeping the process transparent, we help developers protect their bond, their asset, and their reputation.