26 April 2018

Don’t get bitten by a Zombie DA

A recent High Court case has highlighted that development approvals are not dead and buried once a development is substantially complete.

In Pike v Tighe, some land was subdivided pursuant to a development approval which included a condition requiring an easement to be granted over part of one lot (lot 1) in favour of another (lot 2) for access, on site manoeuvring, services and utilities.  The development approval was issued in May 2009, and an easement was lodged with the council along with the plan of subdivision, but it did not comply with the condition because it did not provide for on site manoeuvring or connection of services and utilities.  Despite this, the council sealed the plan and the easement and plan were registered.  Lot 1 was sold to the Tighes in 2011.  Lot 2 was sold to the Pikes in 2012.

A dispute evidently arose between the two lot owners about whether the Pikes were entitled to an easement which included rights to manoeuvre and connect to services and utilities, and whether the council could force the Tighes, as the owners of lot 1, to grant such an easement.

Section 245 of the Sustainable Planning Act (which was then in force) provided that a development approval attaches to the land and binds successors in title and any occupier of the land.  A similar provision can now be found in section 73 of the Planning Act 2016.

The High Court ruled that the condition of a development approval obtained by the original developer did bind the current owners of the land, despite the site having since been subdivided, and the present owners (the Tighes) could be forced to grant the easement.  By failing to comply with the condition of the development approval within a reasonable time after they had become the owners of the property, they committed a development offence.

The case was somewhat unusual in that the council involved had sealed the plan without the condition having been properly complied with, but this can occur from time to time for a variety of reasons.  It is not uncommon for a property owner or occupier to have failed to comply with development conditions.  For example, this can be the case where there is a material change of use approval, and the council has no “hold point” such as plan sealing to ensure compliance before the use starts, or perhaps the condition was originally complied with but circumstances have since changed so that the property is no longer compliant.

Development conditions for commercial properties in particular can have a substantial impact on the owner of the property by, for example, requiring a substantial easement to be granted over the land, or requiring the owner to upgrade the road providing access to the property.  It is certainly worth having your lawyer check the planning position out thoroughly as part of your due diligence process before you complete a purchase.  If you do not, an approval which you thought was finished off by a previous owner or occupier might just come back to bite you.

For more information about this issue and all commercial property matters please contact our partner and accredited property law specialist, Nigel Hales on 07 4036 9700.

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