Making time: extending development approvals in light of COVID-19

There is much uncertainty surrounding the impacts of COVID-19. What is possible one morning may be impossible, if not outlawed, the next. Amongst these changes, developers are having to make decisions regarding projects while also holding a crystal ball to the future. 

These decisions involve considerations as to contractual commitments, commercial necessity and the extent to which approvals have already been obtained.

However, subdivision and development approvals often have time limits which are imposed either as a condition of the approval, or as a result of the legislation under which the approval is granted. Where there is a time limit on an existing subdivision or development approval, the question then becomes whether this can be extended to allow for a project to be carried out in the future. Making this issue even more complex for national developers is that the regime for extending planning approvals differs in each State.

In some jurisdictions, if a development approval has already been ‘substantially commenced’, or ‘physically commenced’ in NSW, the time limit on the approval will no longer apply. In this situation, the key concern will be to ensure that the project has crossed the threshold of being ‘substantially commenced’ or ‘physically commenced’ as per the legislative framework and complex judicial decisions which have considered this concept. For those approvals which require a project to be completed within a specified period of time, the position will be different.

Where works have not commenced, the issue will be whether the relevant authority has the power to extend any time limit on the approval. The following table sets out the general position for each State, although as always, the individual circumstances of the project will need to be considered:

Of course, where the relevant authority has a general discretion as to whether to extend the time limit on a planning approval, this only adds to the uncertainty for a developer. In this context, relevant considerations may include whether there has been a change in planning policy, whether a developer is ‘warehousing’ an approval, or the likelihood of a new planning approval being granted if a fresh application is made. In addition, even if there is no limit on the number of extensions that may be granted, the relevant authority may be reluctant to grant an extension if previous extensions have already been granted. [3]

Approvals often come at great financial and time costs so having to go back to the ‘drawing board’ if an approval lapses will add to what are already difficult circumstances arising from the impact of COVID-19. Even if there is an ability to apply to the relevant court to revive a lapsed approval, that process is not embodied in the legislation and relies on the court’s discretion. Until there is legislative change dealing with this issue, developers will have no choice but to consider the individual circumstances of each project which is even more difficult in the context of our current times.

^{[1] Kinder Investments Pty Ltd v Sydney City Council (2005) 143 LGERA 237 at [3], [6]]: 
[2] See above.
[3] For example, in Victoria, a relevant authority may be reluctant to grant more than two extensions based on the principles set out in Kantor v Murrindindi Shire Council (1997) 18 AATR 285}