Development approval clauses – what are they and how do you ensure you’re covered?

Ensuring Corporate Documents' Enforceability - What to Know

11/06/2024

Developing a property or piece of land comes with its own risks and rewards but what does it mean when a contract says, “subject to development approval”?

Developers and real estate agents often use a subject to development approval clause from a previous contract, without considering whether that clause is right for the new contract.

That’s when an experienced property development lawyer will be able to help ensure your rights are protected. 

A “subject to development approval” clause gives a developer the right to terminate the contract if they are unable to obtain development approval within the time provided in the contract.

Sounds simple, but there are some things to look out for:

  • What if the development application is approved but for fewer lots? 
  • What if the development application is approved but there are conditions such as infrastructure upgrades that impact the project? 

It’s vital the “subject to development approval” clause is properly drafted, to ensure the seller is required to provide you with reasonable assistance to get that approval. 

A good property lawyer will ensure the following items are included:

  • Signing of consents: A development application in Queensland requires the consent of the registered owner of the property to be lodged with it. 
  • Access to the property: You will need access to the property for things like surveys. Ensure there’s a clause in the contract allowing you reasonable access to the property.
  • Right to erect signs: You may have to advertise your development application. In Queensland, this means a sign will have to be put up at the front of the property.
  • Providing documents in the seller’s possession: Land owners will sometimes have documents that might be able to help with your development application. If that’s the case, let your property lawyer know, so they can include a clause that requires the seller to provide you with copies of those documents and potentially even assign the ownership of those documents to you.

Here at GLG Legal, we know how important property development is. That’s why we offer advice in the following areas:

  • Local council zoning regulations and planning instruments
  • Environmental, property, building and construction law matters
  • Purchasing and selling development property
  • Conducting due diligence
  • Drafting and negotiating contracts
  • Negotiating finance agreements
  • Leases
  • Subdivision of land
  • Taxation advice
  • Easements and covenants affecting your property
  • Access to utilities such as water and electricity
  • Challenges and appeals in the Land and Environment Court
  • Joint venture agreements

We have a property law specialist waiting to help you. Contact our office today to make an appointment.

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