BUILDERS AND DEVELOPERS BEWARE: Development consent commencement rules have been tightened. RMB Property and Planning Lawyer TANYA EMMETT explains.
The rules governing how long you have to start building and subdivision work after receiving development consent from your local council have become much more onerous.
This can be critical, especially if you are waiting on finance before you build or start a subdivision. The last thing you want is for the development approval to lapse and send you back to the drawing board.
The Environmental Planning and Assessment Act 1979 provides that a development consent will lapse after five years from the date for which it operates (unless the two year COVID extension applies). However, interpretation of “commencement” of development has changed.
The existing rule under section 4.53 of the EPAA states that:
“Development consent for: (a) the erection of a building, or (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, subdivisions 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.”
This is an objective test and whether work is deemed to constitute physical commencement is a matter of fact and degree.
Previously, courts held ‘engineering work’ to include physical surveying and physical geotechnical investigation on the site, provided the work was a necessary step in the construction of the building or development of the subdivision. Not surprisingly, many developers relied on this ruling to satisfy the commencement test.
However, changes to the EPAA Regulation 2021 have restricted the type of work that previously might have satisfied the test and applies to all consents granted after May 2020 which have not yet been commenced.
The Regulation now specifically excludes the following: creating a bore hole for soil testing; removing water or soil for testing; carrying out survey work, including the placing of pegs or other survey equipment; acoustic testing; removing vegetation as an ancillary activity; and marking the ground to indicate how land will be developed.
Geotechnical investigation work and/or surveying work no longer constitutes "building, engineering or construction work". Something further is required to satisfy the commencement test under the Regulation.
Consequently, developers need clear plans to commence and complete developments within the lapsing period set by the consent to avoid having to overcome the physical commencement test to maintain their consent.
Contact the Property & Town Planning Division at RMB Lawyers to assist you in navigating this complicated area of the law phone on Freecall 1800 681 211 for a consultation, or use our 'Ask a Question' tool on our website.