Incomplete Developments require a complete strategy

LG Leader September 2019

Incomplete developments are posing an increasing headache for councils across the State.  We appear to be in a unique period where debt and mortgage stress and house prices are all increasing, resulting in increased numbers of incomplete developments and less tolerance of them from neighbours.  Councils are often finding themselves dealing with incomplete development owners who are either unwilling or unable to complete their projects or who cannot be located and complaining neighbours who are demanding action.

Whilst these matters can appear difficult, with the correct strategy employed, they can be resolved successfully.

Section 55 of the Development Act 1993 provides councils with the ability to obtain Court Orders requiring the completion or demolition and removal of development where development has been substantially commenced, but not substantially completed within the statutory timeframes.

Whether the Court will order completion of the development or demolition and removal of it can turn upon a number of factors, including: the progress made on the development, the condition of the development, the extent of work required to complete the development, the impacts of the incomplete development and the developer’s circumstances.

Recent, successful outcomes in section 55 proceedings which we have obtained for councils demonstrate that the Court takes these matters seriously and understands that development cannot remain incomplete without an end date. The Court is also aware of the impacts incomplete development can have on a locality and beyond the boundaries of the subject land.

Often, the Court is prepared to make detailed Orders requiring staged completion of developments.  Such Orders allow councils to monitor the completion of developments over time and to intervene quickly, should a particular ‘milestone’ be missed.

Failing to comply with a Court Order is a criminal offence with a maximum fine of $60,000 – not an insignificant amount.  The threat of prosecution ensures that many developers subject to section 55 Orders will complete their development, as required.  Where this does not occur, a prosecution can be commenced.  In our experience, even the most recalcitrant developer will finish a development in circumstances where they are being prosecuted.

Section 55 also provides councils with the ability to undertake work required by Court Orders in case of breach.  The reasonable costs and expenses associated with doing so can be recovered from the developer in accordance with section 55 and can be converted, as necessary or appropriate, to a registered charge or a rating debt.

In some cases of incomplete developments, the key to resolving them is to consider the antecedents of the developer, the state of the incomplete development, the costs of completion and/or demolition and the value of the property concerned and to devise a strategy that takes into account the obtainment of Court Orders and action to be taken if they are breached.  Where such forward planning takes place, councils can obtain appropriate and cost-effective outcomes which resolve incomplete developments.

For more information, please contact us.