Buying an apartment in NSW could soon come with a significant new layer of consumer protection, following the passage of legislation designed to pave the way for 10-year building defect insurance. 

The NSW Government has passed the Fair Trading and Building Legislation Amendment Bill, completing what it describes as the final legislative groundwork required to bring Decennial Liability Insurance (DLI) to the NSW market. 

It sounds technical, but for real estate agents working with apartments, developers and buyers, it's a change worth understanding. 

Building defects have become a significant concern for apartment buyers in NSW. Questions about waterproofing, structural issues, remedial works, special levies and the financial health of an owners corporation are increasingly part of the buying process. DLI is intended to provide another layer of protection. 

What Is Decennial Liability Insurance? 

Decennial Liability Insurance is designed to provide apartment owners with insurance protection against the cost of rectifying serious building defects for 10 years. One of its most significant features is that the insurance stays with the building. 

That means the protection isn't necessarily lost when an apartment changes hands. It is designed to continue even if the original developer or builder later goes out of business. For apartment owners who have watched high-profile building defect cases unfold across NSW, that's a significant distinction. 

Why Does This Matter to Real Estate Agents? 

Agents aren't expected to become building experts or insurance advisers. But if you're selling apartments, particularly in newer developments, DLI is something buyers may increasingly ask about. 

A prospective buyer could reasonably want to know whether a building has DLI, how long the cover remains in place and what the existence of that insurance means for them if they purchase the property. For selling agents, it could also become another piece of information relevant to the way newer apartments and developments are presented to the market. 

The important thing is knowing enough to explain the broad concept accurately without making representations about insurance coverage, building quality or defects that you're not qualified to make. 

DLI Doesn't Mean Buyers Can Skip Their Homework 

This is an important distinction. The existence of a 10-year insurance product doesn't make due diligence unnecessary. Buyers considering strata property should still undertake appropriate enquiries and obtain professional advice about the property and building. 

For agents, the same principles around accurate representations and disclosure continue to matter. If you're aware of information that could affect a purchaser's decision, the existence of an insurance policy shouldn't be treated as a substitute for understanding your existing obligations. 

DLI is another layer of consumer protection; it isn't a guarantee that a building will never experience problems. 

Could It Become a Selling Point? 

Potentially. Building quality and defects have become genuine concerns for buyers considering newer apartments, particularly following highly publicised problems at developments such as Mascot Towers and Opal Towers. 

A building backed by a recognised 10-year defects insurance product could therefore provide additional reassurance to prospective purchasers. For developers and project marketers, that may eventually become an important part of the conversation around new developments. 

For residential agents selling apartments second-hand, understanding whether a building has this protection and being able to direct buyers towards the appropriate documentation could also become useful. But, as with any insurance product, agents need to be careful about how it is described. The existence of cover doesn't mean every possible building issue will necessarily be covered. 

Is DLI Available Now? 

Not quite. This latest legislation establishes the framework required for DLI to enter the NSW market; it doesn't mean every new apartment building is suddenly covered. 

Building Commission NSW is now working with prospective insurance providers to assess policies against the new legislative requirements before products can be rolled out. That's an important distinction for agents and consumers. For now, this is a change to watch rather than something agents should assume applies to a particular property. 

Part of a Much Bigger Shift in NSW Property 

The introduction of DLI doesn't exist in isolation. NSW has been progressively strengthening regulation across strata, building, property and real estate. The government's Strata and Property Taskforce has conducted more than 175 investigations in its first year, while reforms have addressed strata management, conflicts of interest, building maintenance, developer levy estimates and consumer protections. 

At the same time, real estate agents are navigating changes to underquoting laws, stronger Fair Trading enforcement powers and an evolving CPD framework. 

For property professionals, the message is fairly clear: the regulatory environment surrounding property transactions is becoming more complex. 

What Should Agents Do Now? 

There's no need to suddenly become an expert in Decennial Liability Insurance. There is, however, value in knowing that it's coming. Agents working with apartments and new developments should understand the basic concept, keep an eye on further guidance as insurance products enter the market and be prepared for questions from buyers and sellers. More importantly, know the limits of your role. 

When questions move into the specifics of building defects, insurance coverage, legal rights or the financial implications of a particular property, clients should be directed to the appropriate qualified professional. 

Being knowledgeable doesn't mean having every answer. It means understanding the issue well enough to know what information you can provide and when specialist advice is required. 

Staying Across a Changing Industry 

The scope of knowledge expected of today's real estate professional continues to grow. Building defects, strata reform, underquoting, material facts, AML/CTF, supervision and consumer protection can all intersect with an agent's day-to-day work. 

At Under The Hammer, our training and CPD programs are built around helping property professionals keep pace with these changes and understand what they mean in practice. 

Because staying current isn't about memorising every piece of legislation. It's about recognising the issues that can affect your clients, understanding your professional responsibilities and knowing how to respond when they arise. 

This article provides general information only and does not constitute legal, financial or insurance advice. Property professionals and consumers should obtain appropriate professional advice for their individual circumstances.