We have experienced, in the last 6 months, buyers undertaking a deeper level of due diligence on properties, particularly as to how the building was constructed and the way in which its construction was originally approved.
This may be due to the less frenetic pace in which transactions are happening now or it may be due some high-profile scandals involving poor building workmanship.
Buyers are now regularly requesting occupation certificates, building certificates and construction certificates, sometimes not knowing the difference or what they actually mean.
We’ve set out below some key ‘town planning’ jargon that is relevant in a building’s development and construction to hopefully clarify what is often a misunderstood area.
A Development Application (or ‘DA’) is actually required for most ‘development’ in NSW. ‘Development’ is defined fairly broadly under the Environmental Planning and Assessment Act 1979 (the ‘EPA Act’).
However, minor building renovations or works are classified as ‘exempt development’. Exempt development is very low impact such as decks, garden sheds, carports, fences, repairing a window or painting a house.
Alternatively, you may not require a DA because the works are ‘complying development’.
‘Complying development’ is low impact and routine development work that meets certain pre-determined development standards and can be assessed and approved by a certifying authority (council or private accredited certifier) within 10 days of lodgement.
Complying development can include things such as renovations to a home, building a granny flat, building a swimming pool, property extensions (up to 2 storeys), building a garage or carport or the demolition of a building.
COMPLYING DEVELOPMENT CERTIFICATES
Once works are determined to be ‘complying development, a complying development certificate (‘CDC’) is issued.
Note that not every property will be eligible for a CDC. This will depend on things such as its heritage status, whether it is flood or bushfire prone land and other things. Whether or not a property is eligible for complying development will be set out in the contract for sale for the property in the Section 10.7(2) Certificate (previously known as a ‘Section 149 Certificate’).
If a DA is required then a Construction Certificate (‘CC’) will likely be required too and it should be obtained before an owner begins works on a property.
A CC is a certificate that is issued by a Principal Certifying Authority (‘PCA‘) for the development, which may be Council or another accredited certifier. certifying that construction can commence on a project. The purpose of the Certificate is to ensure that the work you intend to carry out complies with the Building Code of Australia (BCA).
An occupation certificate is essentially the legal permission to occupy a building and is required for any new building work, or change of use of a building, that required a DA or a CDC.
To obtain an Occupation Certificate, the following, although not limited to, may be required:
- Development Consent or Complying Development Certificate
- Construction Certificate
- Fire Safety Certificate
- Compliance Certificate
- Building Sustainability Index Certificate (BASIX)
An occupation certificate is issued by a PCA.
An Occupation Certificate cannot be issued for the occupation or use of a new building more than 12 months after the date on which the building was first occupied or used.
INTERIM OCCUPATION CERTIFICATE
An interim occupation certificate allows commencement of either the occupation or use of a partially completed building, or of a new use of part of an existing building resulting from a change of use of the building.
From 1 September 2019, due to a change in law, it is no longer possible to obtain interim occupation certificates for buildings in NSW.
A Building Certificate is essentially a ‘certificate of nonaction’ issued by Council relating to an existing property. It states that Council will not take any action for a period of 7 years to order, or take proceedings for an order, to have the building covered by the certificate to be demolished, altered, added to or rebuilt.
A building certificate is therefore the kind of thing that would be likely pursued retrospectively by someone who is done development works without following the tradition development application route.
WHAT HAPPENS IF YOU BREACH TOWN-PLANNING LAWS?
The ramifications depend on whether, despite not obtaining a DA, the development is otherwise permitted or whether the work is completely prohibited.
Failure to obtain proper planning approval prior to commencing your development can result in significant fines.
The EPA Act sets penalties of up to $1.1 million for unauthorised or non-complying developments.
Depending on the council and the extent of the development work, an owner can be issued an on-the-spot infringement notice for each breach up to $1,500 (for individuals) and $3,000 (for companies).
Councils can also order demolition or removal of any unauthorised building work.
If you have any questions about this article, please contact the office on 1800 870 407 and one of our solicitors/conveyancers will be able to assist.