Appeal Upheld

Pleased to have assisted our client in obtaining approval through the Land & Environment Court for a town house development in the suburb of Hillsdale.

As can be seen from the judgment here, the issues that had to be overcome included overshadowing, height, scale and setback. 

There was also a relatively unusual contention relating to “toxic risk” associated with the Botany Industrial Park.  The development had to be located and constructed within “toxic injury risk contours” that have been imposed by the NSW Department of Planning to restrict the density of any development in the vicinity of the Botany Industrial Park. 

We worked through the issues with the legal representatives for Bayside Council during the court process to achieve an excellent outcome for the client given the challenges of the location.

It was a great result for the client and I look forward to seeing the finished product.

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Plan for Obtaining Easements for Ground Anchors

The Particulars for Regulated Designs Order 2021 came into effect 1 July 2021, outlining an array of additional required particulars for regulated designs. These mostly relate to the effect any excavation may have on neighbouring properties, with some of the highlights including (in summary):

  • Evidence that steps have been taken to verify the nature and location of underground utilities and footings of structures within the zone of influence of the proposed excavation,
  • Plans, cross-section drawings and elevation drawings that include not only details about shoring and underpinning systems, but also details about structures on neighbouring properties within the zone of influence, and
  • Evidence of a registered easement over the neighbouring property granting the right to install ground anchors on that property.

The full list can be found in the Order itself, but among the rest of the new requirements that last one stands out. According to Schedule 2, section 3(a) of the Order, regulated designs must now include evidence of a registered easement over neighbouring properties to install ground anchors. This means a licence or deed is no longer enough.

There is also no differentiation between temporary ground anchors or permanent ground anchors, which means that any ground anchor will require an easement.

Does This Apply to Me?

There is an exception to this rule if the neighbouring land in question is a public road where consent is given under section 139 of the Roads Act 1993 by the relevant authority.

Otherwise, if your development requires you to install any ground anchors that extend into neighbouring land and building work commenced on or after 1 July 2021, you will be required to obtain a registered easement in order to install those ground anchors.

This change comes with an advantage, but also major disadvantages that developers will have to plan around.

The Advantage: Security

What happens if the neighbouring property in question is sold to a new owner? With a licence, this can turn into an unexpected hurdle. Easements, on the other hand, are registered to the title of the property. They transfer to the new owner along with the property and stay active.

On the topic of ways licences can come to an end, easements can be perpetual (unlike licences) and they can’t be terminated by default. Between a licence and a registered easement, the easement is by far the most secure option for a developer.

Also, having a registered easement over a property gives you an interest in the land as identified in the easement instrument, and carries less restriction regarding how you use or access the land.

The Disadvantages: Time & Cost

Is the neighbouring land being leased or mortgaged? The lessee or mortgagee will have to give their consent.

Is the property under a strata title? The owners corporation is required to pass a special resolution before they can grant you your easement.

Is it owned by a community, neighbourhood or precinct association? They have to pass a resolution unanimously before you get your easement.

And then there comes the cost of paying compensation for the easement, the valuation costs to determine the compensation and the legal costs for you and the neighbouring property, for which you are liable.

Add to this the fact that easements aren’t binding until they’re registered and all this extra time and cost is starting to add up. That’s assuming consent is granted or the resolutions pass. If not, then you may need to apply to the Supreme Court for an easement under section 88K of the Conveyancing Act 1919, extending the delay even further.

It is essential that you plan around the extra time it takes to obtain an easement. Evaluate the need for ground anchors as soon as you can so you can commence the process of obtaining and registering the easement as early as possible. Be prepared for the time it takes for the owners and interested parties of the land to grant the easement, including negotiations and, if necessary, application to the Supreme Court.

If you’re concerned about whether your designs still meet this requirement or any others outlined in the Particulars for Regulated Designs Order 2021, we’re happy to take your call.

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Successful Council Negotiations

Happy to have assisted another small developer who has tried to dip its toes into property development by making an application to Council for a duplex development with granny flats at the rear of each proposed dwelling.

Council initially resisted the application, because whilst the development was permissible in the R2 residential zone, the building of the duplex and granny flats all at the same time (and before subdivision) now categorised the development as multi dwelling housing which became prohibited in the zone.

Proceedings were commenced in the Land & Environment Court, and Council insisted that the duplex had to be constructed and have a Final Occupation Certificate issued before the granny flats could be built, which would have made the construction of the granny flats in such a confined space difficult and prohibitive.

Thankfully, as part of the court process, Council were persuaded to issue a staged development consent where the duplexes and granny flats would be built at the same time, but the granny flats not finally completed (i.e. the kitchen still to be installed), which got the client over the permissibility argument and allowed a development consent to be issued.

A difficult case for a small-time developer, but a very pleasing result in the end.

We look forward to seeing the final product once it is finished.

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Appeal Upheld

Pleased to have assisted our client in obtaining approval through the Land & Environment Court for a boarding house development in Belmore Road Randwick under the Affordable Housing SEPP.

The application was originally refused by Randwick Council.

As can be seen from the judgment, the issues that had to be overcome included maintaining a heritage façade, parking, overshadowing, accessibility, height, scale and character, all on a very narrow and constrained site.

We worked through the issues with Council in the court process to achieve an excellent outcome for the client and a development that will sit well in its location.

It was a great result for the client and I look forward to seeing the quality finished product once it is constructed.

You can find the full judgement here.

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More Relief for Commercial Leases Impacted by Lockdowns

On 13 August 2021, amendments to Retail and Other Commercial Leases (COVID-19) Regulation 2021 and Conveyancing (General) Regulation 2018 came into effect. These amendments extended and expanded protections for parties to commercial leases impacted by lockdowns.

Most notably, the new expiry date for these protections is 13 January 2022. Along with this extension of the relief period, a number of further protections have been instated for both lessees and lessors. We’ve summarised these below.

Does This Apply to Me?

These regulations apply to commercial leases where the lessee:

  1. Qualifies for one or more of
    • 2021 COVID-19 Micro-business Grant
    • 2021 COVID-19 Business Grant
    • 2021 JobSaver Payment
  2. Had less than $50 million (including internet sales) of turnover in the 2020–2021 financial year.

If the lessee satisfies both of these criteria, then they qualify as an ‘impacted lessee’ for the purposes of these regulations and the following applies to you.

Your Obligations as a Lessor

If the lessee is an impacted lessee, then you must not increase their rent until the proscribed period expires.

Also, you must not take action against the impacted lessee for a breach without first going through mediation or renegotiating the lease with the lessee (unless the impacted lessee agrees to the action being taken).

Should any party request to renegotiate the terms of the lease, those negotiations must commence within 14 days of the request (unless both parties agree on an alternative period). All negotiation must be done in good faith, with consideration given to the economic impacts of the pandemic on the parties involved.

Lastly, any actions required by law do not constitute a breach of the lease and may not be used as grounds for action against an impacted lessee.

Your Obligations as an Impacted Lessee

You have to inform the lessor of your impacted status. This includes a statement to the effect that you are impacted and evidence to demonstrate that you qualify under the criteria outlined above.

If the lessor requests this information, you must provide it within a reasonable timeframe. You can also volunteer this information to the lessor at any time before a supposed breach, or as soon as you can afterwards.

Remember that during renegotiations, the requirements of good faith, commencement within 14 days of a request, and consideration of economic impacts also apply to you as the lessee.

Lastly, your lessor may still take action against you on grounds unrelated to the economic impacts of the pandemic.

Resources

You can find the current (at time of posting) version of the Retail and Other Commercial Leases (COVID-19) Regulation 2021 on the Legislation NSW website here.

For advice that is more specific to your situation, we would be happy to take your call.

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Appeal Upheld

Very pleased to have assisted our client in obtaining approval through the Land & Environment Court to increase the capacity of the childcare facility from 24 children to 45 children after commencing proceedings against Penrith City Council who originally refused the proposal.

It was a great outcome for the client who is a family operator, runs a great child care centre, and is extremely pleased at being able to offer an increased child care capacity to that area.

The full decision can be found here.

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Cessation Day is Coming

The NSW government is enacting reforms very soon that will transition the land titles system away from paper, becoming fully electronic. A major part of this reform is that from 11 October 2021, the Registrar-General will no longer be issuing Certificates of Title (CTs). Lodgement must also be made electronically. No paper dealings will be accepted past this date, or ‘cessation day.’

This means CTs will no longer be a legal document. With regard to proof of ownership, practically nothing will change. As the Office of the Registrar-General (RG) stresses, “The Torrens Title Register has always been and will continue to be the single source of truth as to the ownership of a person’s home.” However, don’t assume that you can lose or destroy your CT just yet. The RG outlines two reasons you might want to hold onto it even after 11 October:

  • If a transaction involving your land hasn’t been finalised before cessation day, the CT may still be required to satisfy requisitions or other administrative notices issued prior to that date.
  • Lawyers who rely on CT to establish a client’s right to deal in a transaction conducted before cessation day must retain that CT in line with the requirements for retaining supporting evidence.

Outside of those circumstances, CTs will be largely useless.

Paper dealings will also be phased out. This means lodgement must be made through a subscriber to an Electronic Lodgement Network, such as a lawyer or licenced conveyancer. With that said, it is recognised that certain dealings must be made outside of available eConveyancing systems for technical reasons. Don’t fret, there will be established rules to govern ‘out-of-scope transactions.’ However, these will be very much the exception and not the rule.

For more information, the RG’s website goes into all the changes summarised above. Alternatively, you could consult a lawyer or licenced conveyancer. We are more than happy to take your call!

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Don’t Be Put Out by Put Options

Have you secured the sale of your residential property with put and call options? A recent legal decision shows that sale may not be as secure as you think.

So, What Happened?

A potential purchaser of several residential properties entered into put and call option deeds with several vendors. When the purchaser failed to exercise their call option by a certain date, the vendors decided to exercise their put options. Thereby, the sales contracts attached to those options became binding and the purchaser would be required to make the purchase… At least, that’s what the vendors planned.

Instead, the purchaser rescinded all sales contracts and cited their right to a cooling off period under section 66S of the Conveyancing Act 1919. The vendors were left high and dry.

How could they rescind the contracts if they were made under put and call options? There’s no cooling off period for sales contracts made as a consequence of an option to purchase (section 66T(d) of the Conveyancing Act 1919).

The answer lies in the phrase ‘option to purchase.’ The judge ruled that this language did not include put options, which would be regarded as “options to sell” or “options to require someone else to purchase.”

Since the sales contracts were made binding by the exercising of put options, section 66T(d) didn’t apply. It followed that the purchaser did have a right to a cooling off period and they could rescind the sales contracts when they did.

The Takeaway Is Simple:

When entering into put and call options, make sure you get a section 66W certificate from your potential purchaser. This certificate waives the purchaser’s right to a cooling off period in the case that you exercise your put option.

Many developers consider put and call options to be just as good as a sales contract. This case, however, reveals the differences that could expose you to more risk than you bargained for. Don’t get caught out!

You can find the case of BP7 Pty Ltd v Gavancorp Pty Ltd here.

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Watch the Key Parts of The Developers Forum 2021

The night of March 31st at Rosehill Racecourse was spectacular, as The Developers Forum 2021 was a huge success. If you couldn’t make it this year, don’t fret! You can watch the highlights of the night right here.

The keynote address from our special guest speaker, NSW Building Commissioner David Chandler OAM, “Restoring Confidence and Trustworthiness in the Construction Industry.”

You can also watch the Q&A panel with Mr. Chandler below. Joining him are the founding partners of The Developers Forum: Michael Dakhoul (Construction Consultants), Sid Sfeir (Sfeir Accountants), and our Principal & Director Pierre Saab.

If you like what you’re seeing and you don’t want to miss information regarding the next event, we’d encourage you to follow The Developers Forum on Facebook, LinkedIn or Instagram to stay informed. We’d love to see you there!

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HBCF Construction Classification Updates

icare have updated what constitutes structural and non-structural work for the purposes of providing cover under the Home Building Compensation Fund.

Work is deemed structural if it involves a component that is essential to the stability of a building, or that is classified as a “major element” of the building under the Home Building Regulation 2014.

Additionally, work is deemed structural if it involves cladding, fire safety systems or waterproofing.

A more detailed breakdown, including examples of components that fall under the above classifications, can be found in a document released by icare here.

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