NSW extends timeframes for key events in planning system

By Nick Thomas
28 May 2020
The COVID-19 Legislation Amendment (Emergency Measures – Miscellaneous) Act 2020 (NSW) raises several opportunities for developers.

There is now more time to appeal decisions on development applications, and developers have more time to commence approved developments and may have more time to pay contributions, under legislative changes made to address the COVID-19 crisis.

The NSW Government is addressing issues at both ends of the development approval time line, to facilitate development during and in the aftermath of the COVID-19 pandemic.

We recently commented on several Government initiatives designed to accelerate the development assessment and approval process, and proposed reforms to development contributions.

In addition, two weeks ago, the COVID-19 Legislation Amendment (Emergency Measures – Miscellaneous) Act 2020 (Amendment Act) was passed and commenced operation almost immediately.

The Amendment Act amends a range of legislation, including the Environmental Planning and Assessment Act 1979 (Planning Act) to:

  • extend timeframes for appeals against planning decisions;
  • extend timeframes for the lapsing of development consents;
  • allow the Minister for Planning and Public Spaces (Planning Minister) to extend timeframes for paying development contributions; and
  • relax the requirements for continuous use of land to establish existing use and continuing use rights.

The amendments are temporary, but have been given a generous life span.

These amendments, and a related change to the Environmental Planning and Assessment Regulation 2000 (Planning Regulation), are outlined below.

More time to appeal against planning decisions

The timeframe for an applicant to appeal against a decision on its development application (DA) has been extended from 6 months to 12 months after the date on which the decision is notified to the applicant, the decision is registered on the NSW planning portal or the DA is deemed to have been refused (relevant date).

This extension applies to all DAs for which the relevant date is between 25 September 2019 and 25 March 2022. So the Amendment Act will revive some appeal opportunities which had passed before the COVID-19 pandemic as well as extend the life of some appeal opportunities which arise after the pandemic began.

The timeframe for objector appeals during this period has also been extended from 28 days to 56 days after the relevant date. Given the shorter appeal periods involved, this will revive only some appeal opportunities which have passed, and none which would have passed before the COVID-19 pandemic.

More time to keep consents alive

The timeframe for action to preserve a development consent from lapsing has been extended by an extra 2 years if the consent commenced operation before 25 March 2020 and had not lapsed by that date.

In addition, development consents which lapsed after 25 March 2020 and before the Amendment Act commenced (ie. 14 May 2020) are revived and given a 2 year period (starting on 14 May) for action to preserve them.

Similar extensions have been given for the timeframes to satisfy “deferred commencement” conditions in a development consent to prevent the consent from lapsing.

However, it’s not all good news for developers here. The NSW Government has also amended the Planning Regulation to require developers to do more to preserve their consents.

A development consent will automatically lapse within a prescribed time after it commences operation (usually 5 years leaving aside the COVID-19 extensions) unless:

“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” (Planning Act, section 4.53(4), our emphasis).

The Courts have required relatively little action to satisfy this “physical commencement” requirement. For example, physical surveying and geotechnical investigation work have been enough in some cases.

However, the Planning Regulation amendment excludes the following actions from meeting the “physical commencement” requirement, for development consents granted on or after 15 May 2020:

  • creating a bore hole for soil testing,
  • removing water or soil for testing,
  • carrying out survey work, including the placing of pegs or other survey equipment,
  • acoustic testing,
  • removing vegetation as an ancillary activity,
  • marking the ground to indicate how land is to be developed.

The amendment still allows minimal physical activity to preserve a development consent, but it removes some activities when have been used historically to keep a consent alive.

You might say this is a quid pro quo for the extensions of time, and provides a small indication of the Government’s policy imperative to encourage substantial development work.

More flexibility on existing use and continuing use rights

The Planning Act allows a lawfully commenced use of land for a lawful purpose to continue after the zoning controls on the land are changed to make that use prohibited or to require development consent for that use, without the need for the use to stop or the need for a planning approval as a result of the change in zoning controls. This is known as an existing use right (for introduced prohibitions) or a continuing use right (for introduced development consent requirements).

However, an existing use or a continuing use right can be lost if the use is “abandoned”, which happens if the actual use ceases for a continuous period of 12 months.

The Amendment Act changes the 12 month period to 3 years, but only during the period 25 March 2020 to 25 March 2022. Presumably, this means that, during that period, evidence of ceasing actual use would need to cover a 3 year period instead of a 12 month period.

Extension of time to pay development contributions?

The Amendment Act has added two categories of directions which the Planning Minister can give to local councils about collecting and using development contributions:

  • how money paid as development contributions under the Planning Act for different purposes in accordance with the conditions of development consents is to be pooled and applied progressively for those purposes – directions in this category could facilitate spending on infrastructure projects which, in turn, could facilitate additional development; and
  • the time at which a monetary contribution or levy is to be paid - directions in this category could allow deferral of payment obligations.

Ministerial directions relate to existing and future development consents. An existing consent condition which requires payment of contributions in a way which is inconsistent with a direction is taken to be modified so as to be consistent with the direction, but only for contributions and levies (or components of them) which have not actually been paid before the direction is given.

A payment timing direction can only be given by 25 September 2020, although that expiry date may be extended by regulation for an additional 6 months. We haven’t seen a payment timing direction yet. However, given this short availability window, we can expect a direction soon.

A payment timing direction would not apply to State government contribution requirements or to voluntary planning agreements. However, it does signal a State government willingness to be more flexible in payment timing requirements.

What should developers do?

The Amendment Act raises several opportunities for developers. Actions which developers should consider include (for example):

  • review development strategies (including whether the viability of development projects might change with deferred contribution payments)
  • review DA strategies (including whether extensions of appeal timeframes allow different approaches to resolving DAs which are currently on a “difficult” pathway;
  • review the status of development consents whose developments may not have been “physically commenced” yet, and consider when commencement action should be taken and whether planned action should be increased to meet the new commencement requirements.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.