Case Law Update: Developers Watch Out – No Cost Land Grabs by Councils Can be Legal

In an early Christmas present from the Tribunal on 22 December 2017, the Tribunal in Tarneit Projects Pty Ltd v Wyndham City Council upheld planning permit conditions which required the developer to provide land for road widening at no cost to the Council.

The case involves a developer Tarneit Projects Pty Ltd who was seeking planning permission to allow a 306 lot subdivision over seven stages in Tarneit. The Wyndham City Council imposed a permit condition that the developer had to vest in the name of the Council at no cost a 3.9 metre wide strip of land for future road widening works. The condition arises from a mandatory condition that was required to be included by the provisions of the Urban Growth Zone and the relevant Precinct Structure Plan (Riverdale PSP).

What was found?

The Tribunal has no discretion to delete or amend a mandatory provision of the planning scheme and is bound to apply it. The developer argued that the condition was tantamount to compulsory acquisition without the benefit of compensation under the Land Acquisition and Compensation Act and that the condition was unjust.

The Council has the power to require ‘works, services or facilities’ that a responsible authority considers necessary to be provided by a permit applicant or paid for wholly by the applicant.

Lessons for developers

When purchasing or developing land, make sure regard is had to all conditions in the planning scheme and any precinct structure plans. If there is to be a planning scheme amendment introduced over land you currently own, consider whether an objection to the amendment should be made. Once a mandatory provision is set, you will be bound to follow it and any costs need to be considered as part of the costs of development.

For expert advice on planning and development matters contact Phillip Leaman or one of the Property Law team.