Buying Off the Plan: The Developer Obligations That Protect You, and the Ones That Don’t
By the AgentFind Editorial Team — Australian Property Professional Directory, Sydney
For years the levy estimate in an off-the-plan contract was written by the developer, checked by nobody, and reliably too low — which is why so many new schemes hit their first real levy rise within two years of settlement. In New South Wales that changed on 1 April 2026: developers of applicable schemes must now engage an independent surveyor to certify the initial maintenance schedule and verify the initial levy estimates. It is a genuine improvement, and it is nowhere near the whole protection buyers assume they have.
Key Takeaways
The new NSW requirements attack the two things developers historically got wrong — the maintenance schedule and the opening levies. The building bond, by contrast, is capped at 2% of the contract price and applies only to a narrow band of buildings. The first annual general meeting remains the single most important date in a new scheme’s life.
- From 1 April 2026, an independent surveyor must certify the initial maintenance schedule and verify the initial levy estimates for applicable NSW schemes — removing the developer’s unchecked control of both.
- The strata building bond is 2% of the contract price and, per current NSW Government material, applies to residential apartment buildings of three storeys and below.
- Exclusive supply and utility agreements signed by the developer now expire at the first annual general meeting or after three years, rather than binding the scheme indefinitely.
- Late first AGMs carry penalties of $11,000 for an individual and $55,000 for a corporation in NSW — the first AGM is where control transfers, and developers are now on the clock.
The Initial Levy Problem, and What Was Done About It
Initial levies set the scheme’s opening budget and, crucially, the opening contribution to the capital works fund. Set them too low and the building starts life underfunded, the first committee inherits the shortfall, and the correction arrives as a levy rise or a special levy that buyers never budgeted for. Until the 2026 change, nobody independent checked the figure.
The NSW reform pairs two requirements that only make sense together. An independent surveyor must certify the initial maintenance schedule — the document that records what the building contains and when each part will need attention — and must verify the initial levy estimates against it. Certifying the schedule without checking the levies would produce an accurate list of work with no money behind it; checking the levies without the schedule would be guesswork.
For a buyer, the practical question is simply whether your scheme is one the requirement applies to, and if so, asking to see the certification. If it does not apply, the old caution stands: treat the contract’s levy figure as a marketing number and ask a strata professional what a building of that size, age and inclusion list actually costs to run.
Insider Insight: Count the plant before you sign. Lifts, a pool, a gym, a basement sump, mechanical ventilation, a fire pump, landscaped podiums, embedded utilities and a building manager’s office each carry ongoing cost and eventual replacement. A twenty-lot building with a lift and a pool cannot run on the same levies as a twenty-lot walk-up, and the display suite will not volunteer the difference.
The Building Bond: Useful, and Much Smaller Than You Think
The Strata Building Bond and Inspections Scheme requires a developer to lodge a bond with the Secretary before applying for an occupation certificate for new apartment building work. The bond is 2% of the contract price. Current NSW Government material states that the scheme applies to residential apartment buildings three storeys and below, which may include carparks, common areas and commercial or retail space.
Two things follow. First, 2% is a deposit against defects, not a fund that will fix a serious one. A building with a failed podium membrane or a fire-rating problem can face a bill that dwarfs it. Second, if your building is taller than three storeys, do not assume the bond is what stands behind you — check what regime actually applies, because it has changed.
The scheme runs to a timetable, which is worth knowing because it is the only defect process in Australia that comes with published milestones:
| Stage | Timing after completion of work |
|---|---|
| Building bond lodged | Before the occupation certificate application |
| Building inspector appointed | Within 12 months |
| Interim inspection and report | Between 15 and 18 months |
| Defect rectification period | Indicatively 18 to 21 months |
| Final inspection and report | Between 21 and 24 months |
| Bond payment or release | Between 2 and 3 years |
Mark the interim inspection window in the scheme’s calendar on day one. It is the moment the building’s defects get written into a document with legal consequence, and an owners corporation that arrives at it unprepared has wasted the scheme’s best opportunity.
The First AGM Is Where Control Actually Transfers
At the first annual general meeting the developer’s grip loosens: owners elect a committee, the scheme’s own decisions begin, and under the NSW reforms exclusive supply agreements and other utility agreements the developer signed expire at that meeting or after three years. Developers who fail to convene the first AGM on time now face penalties of $11,000 for an individual and $55,000 for a corporation.
Which means the first AGM is not a formality to sit through. It is the meeting at which to establish who your strata manager is and on what terms, whether the ten-year capital works plan has been prepared and whether it reflects the initial maintenance schedule, whether the initial levies are adequate, whether a defect inspection has been commissioned, and which supply agreements the scheme is about to be released from.
Arrive with those questions written down. Owners who treat the first AGM as an introduction meeting spend the next five years paying for it.
FEATURED CASE STUDY
The Scheme That Opened $84,000 Short
A thirty-lot development settled with contract levy estimates of about $1,050 per quarter for a two-bedroom lot — a figure buyers had compared favourably against nearby stock. The building included a lift, mechanical ventilation to the basement, a fire pump and landscaped common areas.
At the first AGM the newly appointed strata manager’s budget showed the scheme needed roughly $84,000 a year more than the initial estimates had provided for, once servicing contracts, insurance at valuation and a realistic capital works contribution were priced.
Levies rose about 19% in the first full year. Owners who had stretched to buy on the contract figure were the ones who felt it, and several assumed the manager was gouging rather than that the original estimate had been optimistic.
This is precisely the gap independent certification of the initial maintenance schedule and verification of the initial levy estimates is designed to close — which is why buyers in applicable NSW schemes should ask to see it. This is an illustrative scenario built from the typical figures above, not a specific client file.
What to Ask Before You Sign
Ask for the initial maintenance schedule and any independent certification of it, the basis of the initial levy estimates, the expected date of the first AGM, the list of supply and utility agreements the developer has entered into, and what defect security applies to a building of this height. If the answers are vague, that is the answer.
Your conveyancer or solicitor should also check the contract’s sunset clause and the developer’s rights under it, the disclosure statement and any right to rescind if the registered plan differs materially from what was disclosed, and the deposit protection arrangements. Off-the-plan contracts are drafted by the developer’s lawyers; they are not neutral documents, and the parts that matter are not the parts in the brochure.
Finally, keep a copy of everything you were shown while deciding. Floor plans, finishes schedules, levy estimates and marketing material can all be relevant later, and they have a way of disappearing from a developer’s website once a project sells out.
Frequently Asked Questions
➕ Are off-the-plan levy estimates reliable?
➕ What is an initial maintenance schedule?
➕ How much is the strata building bond?
➕ Is 2% enough to fix building defects?
➕ When does the interim defect inspection happen?
➕ Can the developer lock my building into a utility contract?
➕ What happens if the developer delays the first AGM?
➕ Should I use my own conveyancer for an off-the-plan purchase?
Check the Reviews Before You Pick Up the Phone
Off-the-plan is the purchase where professional advice pays for itself most obviously. Every professional listed on AgentFind shows their verified Google rating and review count on their profile, pulled from their own Google Business Profile rather than written for them.
across rated listings
the listed professionals
4.5 stars or higher
listed nationally
Ratings and review counts are sourced from each firm’s public Google Business Profile and refreshed periodically; 341 of 433 listings currently carry a Google rating. AgentFind does not write, edit or solicit these reviews.
Bought off the plan? Tell us in the comments what your contract levy estimate was and what you are actually paying now. Buyers sitting in display suites this weekend would find that more useful than any brochure.
About AgentFind
AgentFind is an Australian directory of property professionals — selling agents, buyer’s agents, mortgage brokers, conveyancers and strata managers — searchable by location and speciality. Listings are not exclusive by area, so more than one professional can appear in the same suburb and you see the full field rather than a single paid name. Enquiries go directly to the professional you contact, and AgentFind takes no commission on any resulting sale.
Have the Contract Reviewed Before You Pay a Deposit
A conveyancer who reads off-the-plan contracts weekly will find the sunset clause and the disclosure gaps in an hour. A buyer’s agent can tell you whether the price stacks up against completed stock nearby.
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Related reading: special levies and capital works funds, building defects and combustible cladding and whether buyer’s agents are worth it.
Important — currency and verification notice
This article is general information only and was current at the date of publication shown above. It is not legal, financial, taxation or strata advice, and it does not take your circumstances into account.
Legislation, regulations, penalties, thresholds, scheme rules and tribunal procedures change frequently, and several of the provisions referred to here commenced or change on staged dates. Before acting on anything in this article you must independently verify the current position that applies to your property and your state or territory — including the relevant strata, property, building and consumer legislation; the jurisdiction, procedures and time limits of the applicable tribunal (for example NCAT in New South Wales or VCAT in Victoria); the content and currency of any certificate you intend to rely on, such as a section 184 or section 108 certificate; and the current status of any building defect, combustible cladding or remediation scheme affecting the building.
AgentFind is a directory service. We do not provide legal, financial or strata advice and we accept no responsibility for decisions made in reliance on this article. Obtain advice from a qualified professional — a solicitor, licensed conveyancer, accountant, licensed mortgage broker or licensed strata manager as appropriate — and confirm current requirements with the relevant government authority or regulator before committing to a transaction or a course of action.
Sources: NSW Government — Guide to strata law changes; NSW Government — Strata Building Bond and Inspections Scheme; NSW Government — building bond lodgement; Strata Schemes Management Act 2015 (NSW).
