Stronger Protections for Apartment Buyers in Victoria
The Victorian Government has introduced Latent Defects Insurance (LDI) as a new option for developers, offering broader protection than the traditional Strata Building Bond. This reform is expected to boost buyer confidence and reshape how risks are managed in new apartment developments.
Instead of lodging a bond equal to 2% of the project’s contract value, Victorian developers can now choose a 10-year Latent Defects Insurance policy.
Broader Protection for Buyers
Latent Defects Insurance offers broader protection than the traditional bond. While the bond only covers defects in shared areas, LDI includes structural issues and faults in design, materials or workmanship across both common and private property. Coverage begins from the date of the Occupancy Certificate and lasts for 10 years, giving buyers greater peace of mind.
Industry Momentum Is Building
Resilience Insurance was the first to offer LDI in Australia, with major Sydney developers already adopting the policy. CEO Corey Nugent says the reform is a step toward restoring trust in off the plan purchases, noting that LDI fills critical gaps left by traditional insurance and gives buyers peace of mind.
What This Means for Strata Communities
LDI is not a replacement for other insurances but a valuable addition that fills important gaps. With New South Wales expected to make LDI mandatory by 2028 and Victoria now offering it as an alternative, strata owners and developers should be aware of its growing role in protecting long term property investments.
Gareth Halverson
General Manager - VIC
