Interim Heritage Orders – when can they be made and what effect do they have on development

Landowners, developers and purchasers of property need to be aware of the increased use by many Sydney councils of their power to make an interim heritage order (IHO) over an item¹ that the council considers may, on further inquiry or investigation, be found to be of local heritage significance, and is being or is likely to be harmed.²

The effect of the making of an IHO over a property can and often does restrict and limit development plans for the property.³

Councils are increasingly using their power to make IHOs in response to:

• development applications for the demolition of a building, and the redevelopment of the property
• the proposed sale of a property, particularly where the property has been held in the same ownership for many decades

An IHO can only be made by a council in relation to a property that is not:

• Listed as a heritage item in the council’s local environmental plan
• Located within a heritage conservation area in the council’s local environmental plan.

As such, due diligence enquiries in relation to any heritage listing or identification under the relevant local environmental plan are not full-proof.

A council can make an IHO quickly and there is no obligation on the council to notify the landowner of its intention to make an IHO before making it.

Before deciding to make an IHO over a building or place, a council must consider a preliminary heritage assessment of the item prepared by a person with appropriate heritage knowledge, skills and experience employed or retained by the council.

The Land and Environment Court (Court) has recently considered the nature of the preliminary heritage report required to be considered by a council before making an IHO.

In Li v Willoughby City Council [2018] NSWLEC 1262, Commissioner O’Neill considered whether an IHO was validly made where the only report before the Council for its consideration was a report prepared by the Council’s planning manager. Attached to the planning manager’s report was a draft Heritage Inventory Sheet for the property, in the standard template format, prepared by the Council’s heritage planner in 2009 and updated in 2014. The draft heritage inventory sheet referred to studies and reports prepared years earlier by heritage consultants.

The Court held:

• The planning manager’s report was not a preliminary heritage assessment because the planning manager did not have the requisite heritage knowledge, skills and experience
• The two earlier heritage reports merely referred to in the planning manager’s report did not satisfy the preliminary heritage assessment requirement because those reports were not placed before the Council for its consideration before it resolved to make the IHO
• The draft Heritage Inventory Sheet attached to the Council report was sufficient to satisfy the preliminary heritage assessment requirement. The Court rejected the applicant’s argument that the two earlier reports referred to in the draft Inventory Heritage Sheet could not be relied upon because the Council had previously decided, following its consideration of those reports, not to list the property as a heritage item.

The effect of the Court’s decision is that a council is able to move quickly in making an IHO over a property. A new heritage assessment report is not necessarily required if an earlier heritage assessment report or a heritage inventory sheet has been prepared by a person with appropriate heritage skills and the document is placed before a council before it makes its decision. This is so even where a council has made an earlier decision based on the document not to list the property as a heritage item or to identify a heritage conservation area that includes the property.

The position may be otherwise:

• If the earlier heritage document concluded that the property, building or area was not of sufficient heritage significance to warrant listing, or the creation of a heritage conservation area. (This is yet to be tested and considered by the Court); or
• Where there has been significant changes to the property or building since the earlier reports or heritage inventory sheet was prepared such as to render the conclusions in the document redundant or irrelevant.

Some further observations arising out of the Li case and in recent IHOs made by councils:

• A council is not authorised by the Minister to make an IHO where a complying development certificate (CDC) has been issued for the demolition of an existing dwelling and the erection of a new single or two storey dwelling house, and the CDC is still in force. In Li a CDC had been issued only for the demolition of the dwelling house on the property and as such, this did not prevent the making of an IHO over the property.
• Landowners and developers need to be aware that many councils are now making IHOs on properties that are offered for sale. This is so even though a council must be satisfied that the item is being or is likely to be harmed. The basis for the potential harm relied upon by councils has been that a CDC could be issued for the demolition of the property pursuant to the Demolition Code in State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 and as such, there is no statutory protection from demolition for potentially significant buildings and places. The reliance on this by councils is misguided because a certifier is required to give the relevant council notice of an application for a CDC for demolition and the certifier cannot issue the CDC until after 14 days after the notice has been given have elapsed: clause 130AB(2)(b) of the Environmental Planning and Assessment Regulation 2000. This gives a council time to act when necessary.The effect of all this is developers should extend their inquiries where heritage could be an issue and seek legal advice about the extent of inquiries that should be made.

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1.“[I]tem means a place, building, work, relic, moveable object or precinct”: section 4(1), Heritage Act 1977 (Act).
2. Section 25 of the Act. Councils are authorised to make IHOs subject to the power of delegation made by the Minister for Heritage on 22 April 2013, and gazetted in the NSW Government Gazette on 12 July 2013 (Ministerial Order).
3. The making of an IHO over the property prevents any approval being given under the Act to any application that would necessitate the demolition of the whole of a building or work on the property while the IHO is still in force: section 63(2)(b) of the Act.
4. Section 26 of the Act.

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