Builders, Developers, Beware of Rule Changes
Builders and developers beware. The rules governing how long you have to start building and subdivision work after receiving development consent from your local council are about to become much more onerous.
This can be of critical importance, especially if you are waiting on finance before you build, or before you start a subdivision. The last thing you want is for the development approval to lapse and send you back to the drawing board.
The NSW Government’s Planning Bill 2013 is expected to be proclaimed early in the new year, and it will bring fundamental changes to the way “commencement" of development is interpreted.
The existing rules under Section 95(4) of the current Planning Act are quite clear, and state that:
"Development consent for: a) the erection of a building: b) the subdivision of land or c) the carrying out of a work, does not lapse if building, engineering or construction work relating to the building, subdivision or work is physically commenced on the land to which the consent applies before the date on which the consent would otherwise lapse under this section".
The interpretation was tested in several court cases between councils and developers. The Court of Appeal ruled that the definition of engineering work could include physical surveying and physical geotechnical investigation on the development site, provided the work was a necessary step in the process required for the construction of the building or development of the subdivision.
Not surprisingly, many developers have relied on geotechnical investigations and physical surveying work on their site as "engineering" work for the purpose of the commencement test.
However, the amended section 95(3) of the Planning Bill states that: “Development consent ... does not lapse if building or subdivision work is physically commenced on the land to which the consent applies before the date on which the consent would otherwise lapse under this clause."
Importantly, the work which must be physically commenced on the land is now "building work" (for the erection of a building) or "subdivision work" (for the subdivision of land). "Engineering work" is no longer referred to.
It is unlikely that physical activity on the land involving geotechnical investigation work and/or surveying work will constitute "building work" or "subdivision work". Something further will be required to satisfy the commencement test under the new section 95(3).
It is likely that a construction certificate for the approved building or road and/or drainage works for a subdivision will be needed; and then for work in accordance with the certificate to be started. This is a far more expensive and time consuming process than the current minimum requirements.
RMB Lawyers recommend that work be carried out in accordance with the current "commencement" test as soon as possible to avoid the consequences of the changes. The new law will apply to all consents which have not been commenced by the proclamation date of the Planning Bill. We can provide advice on what is required.