Lapsing of a Development Consent

Updated June 2020: A development consent can add significant value to land and can be costly to obtain. It is therefore important to understand when it will lapse. This guide will assist you in determining when this will occur.

The statutory lapsing period

The lapsing of a development consent is dealt with in the statutory provisions in s.4.53 (formerly s.95) of the Environmental Planning and Assessment Act 1979 (the Act). These provisions fix a period of time at the expiry of which the consent will lapse unless certain action has been undertaken.

The starting point is s.4.53(1) of the Act. That subsection provides that a development consent will lapse 5 years after the date from which it operates.  However, the 5 year period can be reduced or extended under the subsequent subsections, as explained below.

When can the 5 year lapsing period be reduced?

Any reduction in the ‘default’ 5-year lapsing period is imposed at the discretion of the consent authority when it determines a development application.  However, there are 3 constraints on a consent authority’s ability to do so.  These are:

• If a proposed development involves the erection or demolition of a building or the subdivision of land, the consent authority cannot reduce the lapsing period to less than 2 years from the date that the consent becomes operative;[1]
• If the consent authority issues a development consent for a concept development application which requires the making of a subsequent development application and consent, the lapsing period cannot be reduced at all[2]; and
• For development consents granted between 25 March 2020 – 25 March 2022, the lapsing period also cannot be reduced to a period of less than 5 years.

When can the lapsing period be extended?

If the 5 year lapsing period is reduced by the consent authority, the consent authority may extend the lapsing period by 1 year if the applicant for the consent (or any person otherwise entitled to act on it) applies, under s.4.54 of the Act, to the consent authority for a 1 year extension. Such an application must be made prior to the consent lapsing.[3] The lapsing period cannot be extended by a modification application.[4]

UPDATE: Extension of lapsing dates – COVID 19

The Act and Regulations were amended on 14 May 2020 to include special arrangements for development consents which have lapsing dates that may be affected by COVID-19.  The special arrangements apply to development consents which are issued in the period 25 March 2020 – 25 March 2022 (the ‘prescribed period‘).  The amendments mean that:

• Existing development consents which lapsed between 25 March 2020 and 14 May 2020 (when the amendment took effect) are taken not to have lapsed and benefit from a 2 year extension to the lapsing date;
• Existing development consents which have lapsing dates which fall within the prescribed period are extended by 2 years; and
• A consent authority cannot reduce the lapsing period for a development consent which is granted during the prescribed period – so all consents granted in this period will not lapse for a period of 5 years.

Corresponding changes have been made to the Act to extend the time period for compliance with deferred commencement conditions.

What must be done to prevent a consent from lapsing?

The action that must occur to prevent a development consent from lapsing depends upon what type of development has been approved and when it was approved.

Development involving the erection of a building, subdivision or the carrying out of a work

A development consent for the erection of a building, the subdivision of land or the carrying out of a work will lapse on the lapsing date unless the following three things occur:

• “building, engineering or construction work” is undertaken on the land which is the subject of the consent;
• the work was “physically commenced” before the date on which the consent would otherwise lapse; and
• the work “relates to” the approved development.[5]

A significant body of case law has developed in relation to these three elements and will be summarised below.

“Building, engineering or construction work”

Under the Act, ‘building work’ is broadly defined as ‘any physical activity involved in the erection of a building’.[6] Neither ‘engineering’ nor ‘construction’ work is specifically defined in the Act but the meaning of these terms has been considered by the Courts.

In Hunter Development Brokerage v Cessnock City Council[7]the definition of ‘engineering work’ in the context of a subdivision consent was found to include all activities associated with and forming a necessary part of, the discipline of engineering, survey work and geotechnical investigation applicable to the subdivision. These principles have also been applied to ‘works’ generally (i.e. not just subdivision).[8]

Examples of works which have been held by the Court to constitute ’building, engineering or construction work’ include:

1. extracting samples of water from the site for offsite quality testing;[9]
2. obtaining an acoustical engineering report relating to the noise made by trucks entering and exiting the site;[10]
3. the removal and testing of soil for the purposes of obtaining a remediation and validation report;[11]
4. digging boreholes for testing soil conditions;[12]
5. survey work.[13]

Care needs to be taken in relying on these examples, however, as the circumstances of each development will need to be considered to determine whether the work relied on in fact ‘relates to’ the development the subject of the development consent. A more stringent standard will also apply to development consents granted after 15 May 2020.

On 15 May 2020 the Regulation was amended to specifically preclude a number of these activities from satisfying the requirement for ‘physical commencement’[14]. For consents granted after 15 May 2020 the carrying out of minor activities such as the creation of a bore hole for soil testing, the removal of water or soil for testing, the carrying out of survey work, acoustic testing, removing vegetation and marking the ground to indicate how land is to be developed will be insufficient to amount to ‘physical commencement’. It will therefore be necessary for developers to undertake additional physical works in order to prevent these consents from lapsing.  Going forward when considering whether a development consent has lapsed it will be necessary to first determine whether the consent was granted before or after 15 May 2020 as different rules will apply to each.

“Physically commenced”

The statutory requirement that work is “physically commenced” necessitates that work is commenced upon the land in a physical sense, as opposed to off-site work such as design and planning work.

There does not need to be a material change to the physical nature of the land as a result of the physical work.

“Relating to” the development

The use of the term ‘relating to’ means that there must be some real relationship or connection between the work and the development in respect of which the consent has been granted.[15] The requisite link between the work and the consent will be satisfied if the work is a necessary step in, or part of, the process required for the carrying out of the development. If the work serves more than one purpose, it is sufficient that one of those purposes bears a real relationship to the development.[16]

Importantly, for any work to constitute commencement so as to prevent the consent from lapsing, that work must be undertaken lawfully. Any work which is not lawful, for example, if it is not undertaken in accordance with the conditions of consent or is in breach of the Act, will not ‘relate to’ the development.[17]

Development other than development involving the erection of a building, subdivision or the carrying out of a work

A development consent for any other type of development will not lapse if the use of the land, building or work, the subject of the consent, actually commences before the date on which the consent would otherwise lapse.

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