Physical Commencement in the time of COVID – the what and when

Some developers are turning their minds to preserving their development consents (Consent) during the pandemic by “physically commencing” the approved project.

This gives rise to the age old question:

What work amounts to physical commencement?

The long standing case of Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council [2005] NSWCA 169, afforded generous scope to physical commencement, but this has been narrowed down by recent changes to the Environmental Planning and Assessment Regulation 2000 (NSW) (EP&A Regulations). 

Reg 124AA of the EP&A Regulations now says that the following will NOT constitute physical commencement:

(a)  creating a bore hole for soil testing;
(b)  removing water or soil for testing;
(c)  carrying out survey work, including the placing of pegs or other survey equipment;
(d)  acoustic testing;
(e)  removing vegetation as an ancillary activity; or
(f)   marking the ground to indicate how land is to be developed.

Hunter Development Brokerage said survey work was sufficient to physically commence a project, however it no longer is.

Work will need to be done beyond the activities listed above, which is referable to the project approved by the Consent.

While physical commencement can be an unclear line, the more you do, the safer you are.

What about past consents that were physically commenced before Reg 124AA?

Past physical commencement works will not need to be revisited to preserve the Consent.

Reg 124AA only applies to Consents granted after 15 May 2020. It does not act retrospectively. Work done to physically commence a Consent last year will suffice to preserve it, even if it is one of the types in (a)-(f) above.

When do I have to have physically commenced the project?

The EP&A Act has been modified to give more time for physical commencement during the pandemic, for some Consents.

Under the old rules, a building had to be physically commenced within 5 years of the date of the Consent (or such shorter time stipulated in the Consent itself).

COVID amendments have given a 2 year boost to this period if your Consent was granted before 25 March 2020 and has not lapsed.

The new timeframes for physical commencement are:

  • Consent granted before 25 March 2020 (and hasn’t lapsed) – an extra 2 years on top of the 5 given previously;
  • Consent granted between 25 March 2020 and 25 March 2022 – 5 years;
  • Consent granted after 25 March 2020 – 5 years.

A corresponding 2 year boost applies to the lapsing of a deferred commencement consent.

Councils can still reduce the physical commencement period to as low as 2 years, but you will still have the 2 year boost if your Consent was granted before 25 March 2020.

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