Property Subdivision

Whether the property you own is suitable to be developed will depend on the nature of the planning scheme in which the property is located.

Each local government has a Planning Scheme that sets limits on the type of use and development that can occur on properties, and the consequences of undertaking any of those uses of developments.

For example, there are restrictions on the ability to subdivide land within a Green Wedge Zone, and there are additional developments costs called contributions that are applicable to subdivisions of both a residential and industrial nature.

It is important to seek legal advice prior to making any development applications, to ensure that all potential barriers are identified and addressed in any application, and to ensure that any potential costs are forecasted within the development plan and budget.

In order to undertake a subdivision of Land, it is necessary to obtain a Planning Permit from the local government authority. This planning permit will set the obligations of the landholder that must be met prior to the subdivision being approved.

Whilst the relevant planning scheme will set the minimum requirements that will apply to any subdivision, there are numerous conditions that have some form of discretion attached to them, such as the siting of building envelopes within a subdivision and the way development contributions are paid.

Duffy & Simon assist clients in assessing the potential for subdivision, and the negotiation of permit conditions with local government. A well planned subdivision can mean the difference between achieving the minimum number of lots within the project, or achieving the maximum number of lots within the subdivision project.

There are several costs that arise during the subdivision of land. Often, to the inexperienced land developer these costs come as a shock and can impact significantly on the budget and delivery of the project.

In addition to the costs of undertaking surveys of the land and preparing planning documents and the subdivision application, there will likely also be other significant costs associated with the development that will be required to be paid prior to the subdivision becoming registered.

These additional costs can include the cost of connecting services to the land that is proposed to be subdivided, the cost of upgrading roads leading to or required within the subdivision, and sometimes the cost of dealing with environmental issues or concerns located at or near the land.

It is important to obtain advice prior to commencing an application to subdivide land, and to ensure that you are fully aware of the costs that will apply to any approved subdivision, as well as the timing of when those costs are required to be paid.

A Section 173 Agreement is a contract between the local government authority and a landholder or third party, that places conditions on the ongoing use of the land.

Generally, a Section 173 Agreement comes into being to ensure that the conditions contained on a planning permit that are ongoing, will continue to bind the land holder as well as successive owners of that land.

However, Section 173 Agreements can provide a mechanism for developers to enter into agreements with local government authorities that assist them in the development process, for example by delaying the payment of contributions fees until a later stage of the development, or to record the negotiation of the restrictions that will apply to the use of the land if the development is approved.

There are many issues that must be considered when entering into a Section 173 Agreement, and which require legal advice. For example, particular attention should be paid to the duration of the conditions contained in the Section 173 Agreement, the wording of the obligations of the land holder set out under the document, and also the ability of the local government authority to require the use of such an agreement.