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When do development approvals expire?

A common question is whether it is possible to extend a development consent before the expiry date. There have been many changes to the law in NSW with regard to this in recent years, so this post attempts to provide a summary of the current situation.

Often, it is beneficial for a proponent to obtain approval for a development well in advance of intending to commence construction. This can be due to uncertainties with the approval time, a desire to sell a site with the DA or other considerations such as funding. A site with DA approval for a development is often worth more than a site without DA approval.

Larger and more complex developments may contain a large number of conditions that need to be satisfied before a Construction Certificate can be issued and construction may commence. In some extreme cases, it may even take a couple of years to satisfy all of these conditions.

Section 4.53 of the Environmental Planning and Assessment Act 1979 contains the legislation with respect to lapsing of consents. The following is an extract of the most important part of the clause:

(1)  A development consent lapses 5 years after the date from which it operates.

(2)  However, a consent authority may reduce that period of 5 years in granting development consent. This subsection does not apply to development consent granted to a concept development application under Division 4.4 for development that requires a subsequent development application and consent.

(3)  Such a reduction may not be made so as to cause: (a)  a development consent to erect or demolish a building or to subdivide land to lapse within 2 years after the date from which the consent operates, or (b)  a development consent of a kind prescribed by the regulations to lapse within the period prescribed by the regulations in relation to the consent.

As can be seen above, five years is the maximum period of time for a development consent to operate for, unless physically or actually commenced. Two years is the minimum time. Many Councils will issue a consent for five years, although some Councils will only issue a consent for two years. This is at the discretion of the Council/consent authority.

There were some provisions of the Act introduced around 2010/2011 that provided for all consents at the time to be extended to five years. While the text of these provisions are retained in the Act, they have now expired, meaning that consent authorities again have the option of issuing an approval for two years.

The following provisions of Section 4.53 of the Act are also relevant:

(4)  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, 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.

(5)  Development consent for development other than that referred to in subsection (4) does not lapse if the use of any land, building or work the subject of that consent is actually commenced before the date on which the consent would otherwise lapse.

Note the use of the above terms "physically commenced" and "actually commenced". If a development involving construction is physically commenced within the 2/5 year period, then the consent does not expire and now operates in perpetuity (unless it is later surrendered or revoked - rarely occurs). Actual commencement would apply to developments not involving physical works eg. the change of use of a building. Provided that the use actually commences, then the consent also then operates in perpetuity and never expires.

If a consent is issued by a consent authority for a period of less than five years, an applicant has the option of applying to the authority to extend it by an additional one year only. This procedure is outlined in Section 4.54 of the Act and may be granted if the consent authority is satisfied that the applicant has shown "good cause".

There have been some disputes between developers and Councils/others over what constitutes "physical commencement". Examples of some elements of physical works that were found by Courts to meet the requirements of physical commencement include:

- Survey works as “engineering works” (Richard v Shoalhaven City Council (2002) (note however that this is typically sufficient for subdivisions, but may not necessarily be sufficient for larger developments);

- Preparatory work, including surveys (Tovedale Pty Ltd v Shoalhaven City Council [2005]) (again, more may be needed for larger developments)

- Erosion and sediment control works (Williams v Coffs Harbour City Council [2007])

- Acoustic testing, being a form of engineering works, despite it involving no physical manifestation on the land (Norlex Holdings Pty Ltd v Wingecarribee Shire Council [2010])

- Taking away and testing soil from a site, and the preparation of a remediation and validation report, is engineering work (Zaymill Pty Limited and Maksim Holdings Pty Limited v Ryde City Council [2009])

- Demolition, (Smith v Wyong Shire Council [2008])

As can be seen above, a very liberal approach has often been taken in the event of disputes over what constitutes physical commencement. It is entirely possible that in the event of a dispute, having placed some set-out pegs in the ground or having set up erosion control fences is enough to have met this test, meaning that the consent then no longer expires. A precautionary approach might be to commence with whatever you can feasibly do within the expiry period.

For any questions regarding the above, feel free to get in contact.

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