Victoria’s lower house has passed legislation paving the way for decennial insurance for apartment building defects.

Housing Minister Nick Staikos told parliament that when the scheme starts, developers will be able to arrange for a decennial policy to be issued as an alternative to a developer bond.

“In the long term, when the decennial insurance market in Australia matures, the government proposes that the developer bond scheme will be wound down in favour of a mandatory decennial insurance scheme,” he said.

The scheme has been modelled on NSW arrangements introduced in 2022, to support development of a competitive and affordable decennial market for residential apartment buildings in Australia, Mr Staikos says.

The bill requires that a designated insurer gain Building and Plumbing Commission approval of a decennial product before it can be marketed to developers.

“It is a first-resort, no-fault policy, meaning that an owners’ corporation may make a claim for a relevant defect without having to prove who is liable for the defect,” Mr Staikos said.

Resilience Insurance, provider of an approved product in NSW, says the bill’s passage through the Legislative Assembly is a milestone for apartment buyers, developers and communities.

“Victoria is moving quickly on a reform that will make a real difference for apartment buyers, while supporting better building outcomes and greater confidence in apartment delivery,” CEO Corey Nugent said.

“This is step one. We look forward to the bill completing its passage through the Legislative Council and to working with government and industry to implement the framework effectively.”