New changes announced for NSW development consent preliminary works and lapsing dates
The NSW Government has made key changes to the Environmental Planning and Assessment Regulation 2000 (EP&A Regulation)to heighten the threshold of what constitutes the ‘physical commencement’ of a development consent. Additionally, the introduction of the COVID-19 Legislation Amendment (Emergency Measures – Attorney General) Act 2020 (COVID Act) has extended the date that certain development consents will lapse under the Environmental Planning and Assessment Act 1979.
Works constituting “physical commencement”
On 15 May 2020, amendments were made to the EP&A Regulation to insert a new clause clarifying the level of work that is required to ‘physically commence’ a development, or more precisely, to specify works that will not be sufficient to physically commence a development consent.
A development consent for the subdivision of land, the carrying out of works, or the erection of a building must be physically commenced within five years of the date that is is granted under the Environmental Planning and Assessment Act 1979 (EP&A Act), or the consent will lapse. Prior to the recent COVID-19 related amendments to the EP&A Act, a consent authority could also shorten this lapsing period when granting the development consent.
Development consents will not lapse if ‘building, engineering or construction work’ is ‘physically commenced’ within the period specified in the consent (which is usually 5 years unless otherwise reduced by the consent authority).
Historically, a liberal interpretation of ‘physical commencement’ by the Courts meant that preliminary development activities – such as the carrying out of survey work, marking the ground to indicate plans for development or even the planting of vegetation – was sufficient to physically commence a development consent. This was beneficial in the circumstances of slow moving projects, whereby proponents could rely on minimal, preliminary works (for example carrying out surveys) to “physically commence” a consent, even with no substantive building work underway. Once the development had been ‘physically commenced’ in accordance with the conditions of the consent, it would continue to run with the land indefinitely (unless the consent contained a condition expressly limiting the life of the development). It is likely the intent behind clause 124AA is to expedite the carrying out of more substantive works approved under a development consent.
Under the recent amendments to the EP&A Regulation, ‘physical commencement’ is specified to not include:
- creating a bore hole for testing;
- removing water or soil for testing;
- carrying out of survey work (including the placing of pegs or other survey equipment);
- acoustic testing;
- removing vegetation as an ancillary activity to those activities approved under the development consent; or
- marking the ground to indicate how land will be developed.
Considering that the EP&A Act has historically provided little guidance on the meaning of ‘building, engineering or construction work’, these changes should give proponents greater clarity on what needs to be done to physically commence a consent – noting however that the threshold is now slightly more onerous than before.
The new ‘physical commencement’ threshold will only apply to development consents granted after 15 May 2020. For projects with development consent granted after 15 May 2020, some adaptation strategies worth considering include:
- encouraging aspects of funding and organisation of supplies and relevant personnel to be organised as soon as possible before or following the grant of consent so that physical commencement can be achieved;
- ensuring other activities above the threshold have commenced before the five year lapsing date on projects and these activities are well documented; and
- if the five year period is looming and substantive works on the development have not commenced, seeking legal advice on whether any of the works that have been carried out will still constitute ‘physical commencement’ or if an entirely new application is required.
Extension of lapsing periods
As part of the numerous changes introduced by the COVID Act, certain development consents will lapse two years after the five-year period prescribed under the EP&A Act.
Development consents that were operational (i.e. had not lapsed) at 25 March 2020 will lapse an additional two years later than what the consent provides for. These changes also apply to deferred commencement consents (i.e. development consents that do not become operational until certain conditions are satisfied).
Similarly, the changes introduced under the COVID Act revives development consents that have lapsed between 25 March 2020 and 14 May 2020 (being the date that these changes commenced). These consents will also receive the benefit of an additional two year extension prior to lapsing.
Development consents granted after 25 March 2020 will remain subject to the five-year lapsing period, however consent authorities will not have the ability to reduce the lapsing period to less than five years (as was previously possible under the EP&A Act) if the consent is granted between 25 March 2020 and 25 March 2022.
In light of all of the above, development consents that would have lapsed between 25 March 2020 and 15 May 2020 will receive the two-year extension but must meet the higher physical commencement threshold.
For further information on any of these issues raised in this alert, please contact Patrick Holland or Kate Swain.