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Buying an apartment off the plan in Melbourne can feel like a leap of faith. You fall in love with the display suite, picture Sunday coffees on the balcony, and put down a deposit while the site is still a hole in the ground.
Then someone mentions ‘the cladding audit’ and your stomach drops.
Most buyers aren’t worried about the paint colour or the tapware. They’re worried about safety, delays, and being stuck in limbo when the building is meant to be finished.
Let’s clear up what ‘cladding audit’ usually means in Victoria in 2026, what you can ask for as an off the plan buyer, and how the July 2026 reforms change the way defects are handled after handover.
What people mean when they say ‘cladding audit’
In Victoria, there was a Statewide Cladding Audit that focused on existing buildings with combustible external wall materials. That audit process, run by the state building regulator at the time, wrapped up on 30 June 2023. From there, the job of identifying and managing combustible cladding risks shifted to Cladding Safety Victoria and local councils.
That history matters, but if you’re buying a brand new apartment, you’re usually not ‘in’ that statewide audit.
So why do buyers still hear the phrase?
In day to day practice, ‘cladding audit’ often gets used as shorthand for the checks that happen during design and construction to make sure the façade and fire safety design meet Victorian rules. For a new Class 2 apartment building, the developer needs a building permit, sign off from the relevant practitioners, and an occupancy permit before anyone can lawfully move in. The external wall system is part of that story.
If something is picked up late, it can slow the path to the occupancy permit, which can flow straight through to your settlement date.
The big point for off the plan buyers
You won’t usually be asked to commission a cladding audit yourself. Your risk sits elsewhere:
Whether the building can get an occupancy permit on time.
Whether the façade materials match what was promised in your contract.
Whether any late changes or compliance issues push completion out.
Whether you and the owners corporation will have a clear, funded path to fixing defects after handover.
The hard part is that you can’t stand outside a partly built tower in Docklands or Southbank and tell if the façade system is compliant. You’re relying on paperwork, the contract terms, and the regulator driven approvals that sit behind the scenes.
What has changed for 2026 buyers
Two things are front of mind for off the plan apartment buyers heading into 2026.
Ongoing attention on combustible cladding risk
Cladding Safety Victoria is still active in Victoria, working with councils, owners, and owners corporations on buildings where combustible cladding is present. Even if your new building is designed to meet current requirements, the market’s sensitivity to façade risk has not gone away. Buyers and lenders ask more questions now than they did a decade ago.
A new developer bond from 1 July 2026 for taller apartment buildings
From 1 July 2026, developers of residential apartment buildings over three storeys are expected to provide a developer bond before applying for an occupancy permit. The bond is set at two per cent of the total build cost and is held for around two years after the occupancy permit is issued.
This bond is aimed at defects that show up after handover, when owners in taller buildings have historically had fewer safety nets than buyers of houses or low rise builds. It is not a magic wand for pre settlement delays, but it is a meaningful shift in the way apartment defects can be funded and enforced.
How a façade issue can delay your settlement
Most off the plan contracts link settlement to a milestone such as registration of the plan of subdivision and the building being fit for occupation (often tied to the occupancy permit). If the occupancy permit is delayed, settlement usually moves with it.
Here are a few ways a façade or fire safety issue can cause a delay:
A materials substitution late in the build triggers extra assessment.
The fire safety engineer requests changes to improve fire spread resistance.
The building surveyor won’t issue the occupancy permit until certain items are rectified.
Documentation is incomplete, so the permit process drags out even if the building work is done.
None of this is theoretical. It’s the sort of thing that turns a ‘late spring completion’ promise into a summer of living out of boxes and renegotiating with your lender.
If you want a deeper read on what happens when timelines blow out and the paperwork doesn’t line up, the guide on settlement delays is a useful companion.
What you can ask for before you sign
Off the plan contracts are often thick, repetitive, and light on the details buyers actually care about. The trick is knowing where the clues sit.
A conveyancer can’t inspect the finished building, but they can spot the contract terms that decide who carries the pain if something goes wrong. A few practical items to ask about:
Façade and materials
Is there a schedule or specification that describes the external wall materials?
Does the contract allow the developer to swap materials, and if so, what limits apply?
Are there clear drawings and finishes schedules, or is it all ‘artist’s impressions’ language?
Approvals and compliance
What is the stated pathway to the occupancy permit?
Are there clauses that let the developer extend time for approvals?
Is there wording about compliance with laws at completion, not just at signing?
Owners corporation and building information
What documents will be provided to the owners corporation at handover?
Is there a building manual or handover pack referenced?
Who is nominated as the initial owners corporation manager, and what records will be kept?
When you’re scanning the disclosure material, keep an eye out for building compliance red flags like vague promises about ‘to be confirmed’ approvals, missing building information, or language that gives the developer very wide discretion to change key parts of the build.
The contract clauses that most often trip buyers up
A lot of the stress around cladding and compliance is not the technical side. It’s the timing side.
Here are the clauses we keep coming back to with Melbourne buyers.
Completion and notice requirements
Developers usually serve a notice when the apartment is ready and the plan is registered. The notice starts the settlement clock. If completion slips, you want to know what notices must be given, and how much lead time you’ll get.
Time extensions
Most contracts allow extensions for weather, industrial action, supply delays, or approval delays. The wording matters. A clause can be fair, or it can be broad enough that ‘delay’ becomes the default.
Material changes
Look for what counts as a ‘material’ change, what happens if the developer changes a key element, and what rights you have if what gets built is not what you agreed to buy.
Sunset clauses
In Victoria, developers do not have a free hand to walk away just because the project took longer than expected. Sunset clauses are regulated and a developer may need your consent or a court order to rescind in many situations. The details still depend on the contract and the facts, so it’s worth having this explained before you commit.
The July 2026 developer bond and what it means in plain language
Buyers often hear ‘bond’ and assume it protects them against everything.
It doesn’t.
Think of the developer bond as a pot of security held by the regulator for a set period after the occupancy permit is issued. If defects are found and the right process is followed, the owners corporation may be able to claim against that bond to fund rectification.
For cladding related problems, that could matter if an issue is discovered after handover, such as a defective installation, water ingress tied to façade details, or a system that doesn’t perform as designed. Whether a particular issue falls within the bond process will depend on the scheme rules and the nature of the defect.
What the bond does do is change the balance of power in the early years after you move in. It is harder for problems to be ignored when there is money set aside and a regulator involved.
What it does not do is guarantee that settlement will be on time. If a compliance issue stalls the occupancy permit, the bond is not a shortcut.
Melbourne scenarios that feel familiar
A late materials switch in the inner north
You buy in a Brunswick or Coburg project. Halfway through construction, the developer changes the façade product because a supplier can’t deliver. The substitute might still be legal, but it needs reassessment and sign off. The build keeps moving, yet the approvals trail behind. The completion date shifts, and your loan approval needs an extension.
A ‘nearly finished’ tower that still can’t settle
In Southbank, the building looks done from the tram. Inside, there are last minute fire safety items being adjusted and documentation still being pulled together. Your notice of completion arrives later than promised. The apartment might be ready to live in, but without the occupancy permit the settlement date won’t be set.
The building is fine, the paperwork isn’t
This one is common. The physical work is complete, but the flow of certificates, declarations, and sign offs takes longer than expected. Buyers who plan a tight move, especially into a Friday settlement, feel the stress. Giving yourself breathing room and thinking about settlement timing can save you a lot of scrambling.
Money traps to plan around
Even when the developer pays for any rectification required before handover, delays can still cost buyers.
Loan approvals and valuation windows
Many lenders issue approvals for a limited period. If settlement moves out, you might need to reapply, provide fresh payslips, or accept a new valuation. If interest rates have moved, your borrowing power can change too.
Bridging rent and moving plans
A few weeks can be manageable. A few months can mean extra rent, storage fees, and rebooking movers. If you’re selling and buying in a chain, it can also create pressure on your own sale settlement.
Insurance and owners corporation set up
Once you settle, the owners corporation must insure the building and manage common property. You want clarity about what is insured, what records are kept, and how defects will be logged and pursued in those first two years when the developer bond is in play.
A simple way to reduce risk before you commit
You don’t need to become a building expert. You do need a plan.
Get the contract and vendor statement reviewed early, before you’ve emotionally moved into the display suite.
Ask direct questions about façade materials and the right to change them.
Build flexibility into your finance and living arrangements. Assume dates can move.
Keep records of everything promised to you, including brochures and schedules.
Make sure you understand what documents you will receive at handover, and what the owners corporation will need to manage defects.
This is where having a conveyancer for apartment purchases can make the difference. Off the plan contracts often look standard on the surface, but the risk sits in the fine print.
If you get told settlement will be delayed
It’s stressful, especially if you’ve given notice to your landlord or lined up tenants for your current place. A calm, practical response helps.
Ask for the reason in writing and check what the contract says about delays.
Speak with your lender or broker right away about extending approvals.
Hold off on booking removalists until you have a firm settlement date.
If you’re selling, update your selling agent and your own conveyancer so your dates stay workable.
If the delay is tied to approvals or compliance, the key question is whether it is a genuine step on the path to the occupancy permit, or a general ‘construction is running late’ delay. The contract terms decide what notices are required and what rights you have.
Talk to Pearson Chambers Conveyancing before you sign
If you’re buying an apartment off the plan in Melbourne in 2026, it’s worth getting the paperwork checked before you commit. We’ll look at the contract terms that control timing, the clauses around material changes, and the practical steps that help you avoid nasty surprises close to settlement.
Email contact@pearsonchambers.com.au
This information is general only and is not legal advice.