In NSW it can take many months and sometimes years to obtain planning approval for development on new projects. This means that the economic and financial context and the market demand for a project can change in this timeframe such that it may not be the right time to implement the approved project by the time it is approved.
Development consents in NSW lapse and therefore planning approval expires and cannot be revived if certain actions are not taken before the lapsing date for the development consent. To maintain value in the land the subject of the planning approval, landowners and developers seeking to wait out poor market conditions should consider the following when seeking to prevent the lapsing of development consents:
- Does the consent have deferred commencement conditions? If so, the timeframes for compliance are often quite tight. If those timeframes can’t be met, a modification application could be lodged to vary the timing.
- What is the timeframe for lapsing of the consent? How long will the development approval last? This is usually specified in the consent and is a minimum of 2 years and maximum of 5 years from the consent becoming operational.
- If the timeframe for lapsing in the development consent is specified as less than 5 years, has an application been lodged to extend it? Any such application can only seek an additional 1 year and it should be lodged well before the lapsing date.
- What works or activities can be undertaken to prevent lapsing of the consent? In essence, the development approved in the consent must be activated by either:
- Physically commencing building, engineering or construction work for consents authorising the erection of a building, subdivision work or the carrying out of a work; or
- use of the land for which consent was given if the consent does not authorise any building, engineering or construction work.
- What conditions of the development consent or legislative requirements must be met before the works or use commences to ensure the works or use is lawful? If there is a non-compliance then the works or use will be ineffective to prevent lapsing of the consent.
- What modifications to the development consent are advisable to enable commencement without incurring substantial costs? A timeframe should then be allowed for that application to be processed well before the due lapsing date.
- What records will you have to evidence the works undertaken before the lapsing date and that there was compliance with the conditions to demonstrate to an authority or subsequent purchaser that the development consent has not lapsed?
There are numerous cases on what constitutes commencement and it is advisable to seek legal advice on the likely acceptability of the works proposed before the consent nears its lapsing date. This is because once the lapsing date has passed, the consent cannot be reactivated or re-enlivened by seeking to undertake further works or by retrospectively addressing conditions of consent.
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