In brief - Take time to negotiate and document conditions
Many contracts, leases and other documents are subject to the obtaining of a development consent. Often parties do not give sufficient thought to what constitutes a satisfactory development consent from the perspective of all parties such that the transaction contemplated will not continue if that form of consent is not received.
Disputes may be avoided through careful negotiation with all parties
The following seven matters need to be considered and negotiated in great detail and incorporated in the appropriate document to ensure that disputes do not arise in respect of this issue:
1. Detail who is to apply for the consent and within what timeframe. Any automatic extensions of time need to be spelt out.
2. Specify the input of the non-lodging party into the development application process.
3. There needs to be mechanisms acceptable to both parties built into the arrangement whereby the lodging party communicates developments with regards to the consent to all other parties and the extent to which the non-lodging parties are to have an input in the pursuing of the development consent.
4. The right of the lodging party taking appropriate court proceedings if consent is deemed to have been refused because it is not issued within the statutory period needs to be agreed, as well as whether there is to be an obligation on the lodging party to prosecute such an appeal and, if so, who bears the costs.
5. What the parties agree are the minimum acceptable terms of the development consent.
We have seen many instances where parties have not given this sufficient consideration and have just said that it is the consent for a certain gross floor area or for a particular number of units (without specifying size or bedroom configuration) or for "residential purposes".
During the negotiation process, the parties have to put their expectations with regards to the development consent terms "on the table" and make sure that everyone agrees with what the minimum acceptable approved development will be.
6. Give thought to other terms and conditions which will issue in the development consent other than the basic consent for the type of development which will be allowed.
For example, if contributions are above a certain level, if there are unusual conditions imposed in relation to the manner of construction or preservation of heritage items which would greatly increase the expected costs of the development, then these conditions may be unacceptable to one or more parties.
7. One of the most important things with these type of conditions is timeframes.
There must be benchmarks for not only obtaining a consent but for various steps in the consent process so that parties are not bound to an agreement for an unreasonably long period of time if it becomes apparent through the process that the consents will not or cannot issue.
Acting in haste may mean repenting at leisure
Unfortunately these matters are often not given sufficient attention and consideration by the parties in the rush to "get the deal done". However, this is time well spent, as otherwise one or more parties may live to regret the consequences of a rushed, ill-considered and poorly defined condition.
This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal or financial advice. Please seek your own legal or financial advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.