How Resilience Latent Defects Insurance (LDI) helps off the plan apartment developers

As the first and only provider of Latent Defects Insurance in Australia, Resilience Insurance has introduced a level of cover never seen in the Australian development market.

Used in over 40 countries globally over the past seven decades, Latent Defects Insurance (LDI) has only just found its way to Australia, with Resilience Insurance the only provider of the insurance currently.

Resilience Latent Defects Insurance has obvious benefits to off the plan property buyers, protecting them from any structural and waterproofing defects to the building for 10 years post completion.

However, there are significant benefits developers are seeing from having Resilience LDI on their projects. 

Latent Defects Insurance protects the build process

Resilience LDI introduces rigorous quality control measures throughout the build process, which developers have said has been one of the most attractive factors of having LDI.

Resilience have partners who provide what is called the Technical Inspection Service (TIS), an independent oversight program delivered by experts who conduct thorough inspections throughout the construction process, from before the first shovel hits the dirt through to internal fitout.

The proactive approach ensures that any defects are identified and rectified before completion, all but ruling out any post-construction issues.

By catching potential problems early, developers can deliver a higher-quality product, minimising the risk of disputes and enhancing the building's durability.

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Latent Defects Insurance adds another layer of protection

While the regular investigations through the build process by the TIS providers should mean no building with Latent Defects Insurance would face structural damages, if something has been missed, then that’s when LDI kicks in. 

Resilience handle the process on behalf of the developer, and in turn the buyers, rectifying any issues without either facing hefty bills. 

There’s also a benefit to the TIS program in the unlikely scenario something happens to the construction company building the development.

Due to the diligent work of the TIS providers who are frequently on site during the build, there’s a full, third party record of where the builder was up to, which makes it easier to transition to a new builder, and maintain Latent Defects Insurance coverage on the development. 

Latent Defect Insurance can increase sales price

There’s no questioning the importance of Resilience LDI for buyers. It’s the most comprehensive policy any off the plan buyer can have, which inevitably makes any new development with the cover a much more attractive proposition.

Generally, Resilience LDI costs the developer 1.5 per cent of the construction cost of the building. Data collection from Urban's audience showed buyers would pay more than 1.5 per cent to have LDI on its development, meaning a developer could actually profit by having LDI on their project given the retail value of the apartments is much higher than the construction cost.

Sydney developer Kanebridge had buyers paying seven per cent more once they brought Latent Defects Insurance compared to before having it on in their Tallawong development Ophora (pictured). Kanebridge also noted an increase in speed to sale.