It’s a terrible spot you find yourself in. I don’t know if your granny flat is part of a strata scheme (I suspect not, based on what you describe) or just part of a suburban back-yard.
If it’s part of a strata scheme, then the owner can seek redress from the OC, as the walls/roof etc, are common property and should never have been allowed to sink into such a state of disrepair that the building ends up being condemned. The owner would be entitled to compensation from the OC in that case, so you may be able to strike a deal with the owner in terms of rent reduction for the time remaining, but that’s about as far as it will go.
If, however, it’s a granny flat in the owner’s backyard, there is much less you can do. If you stop paying rent, then you will lose your bond. If you are renting through an agent, they may also place you on a tenant black-list which will make it difficult to find new accommodation.
If you are renting privately, there is less chance of being black-listed, but it is still a big gamble. The best thing I would do is to try and strike a deal with the owners directly (don’t go through their solicitor) to get your bond refunded early and/or a rent reduction.
Fair Trading have given you advice that is probably close to the mark: you have entered into a contract with the owner and received what was promised in that contract, nothing in any rental agreement I’m aware of says that the building must be up to council code or that the tenant is compensated if a demolition order is placed on a property.
The only disclosure requirements I’m aware of are that the building must be habitable, not subject to flooding/bushfire within the last 5 years, not the scene of a violent crime, doesn’t pose a known safety risk or that the land contains easements/right of ways.
I hope that you get a good outcome, but I suspect that the best option under the circumstances is that your bond is returned in full.