Property developers will have to pay money to NSW Fair Trading under a scheme designed to protect home buyers from builders that walk out on "dodgy or unfinished work".

The Strata Building Bond and Inspections Scheme is designed to provide a process to rectify defects during the early phases of construction.

The NSW government will require property developers to lodge a bond with Fair Trading to pay for unfinished or dodgy work. Credit:James Alcock

The NSW Minister for Better Regulation, Matt Kean, said the defect bond scheme was intended to reduce costs for both developers and buyers, cut time delays in rectifying issues and minimise expensive, time-consuming legal action.

"Developers will now be required to lodge a building bond, which is equal to 2 per cent of the contract price with NSW Fair Trading," Mr Kean said in a statement.