Seven practical considerations for agreements subject to
In brief - Take time to negotiate and document conditions
Many contracts, leases and other documents are subject to the
obtaining of a development consent. Often parties do not give
sufficient thought to what constitutes a satisfactory development
consent from the perspective of all parties such that the
transaction contemplated will not continue if that form of consent
is not received.
Disputes may be avoided through careful negotiation with all
The following seven matters need to be considered and negotiated
in great detail and incorporated in the appropriate document to
ensure that disputes do not arise in respect of this issue:
Detail who is to apply for the consent and within what
timeframe. Any automatic extensions of time need to be spelt
Specify the input of the non-lodging party into the development
There needs to be mechanisms acceptable to both parties built
into the arrangement whereby the lodging party communicates
developments with regards to the consent to all other parties and
the extent to which the non-lodging parties are to have an input in
the pursuing of the development consent.
The right of the lodging party taking appropriate court
proceedings if consent is deemed to have been refused because it is
not issued within the statutory period needs to be agreed, as well
as whether there is to be an obligation on the lodging party to
prosecute such an appeal and, if so, who bears the costs.
What the parties agree are the minimum acceptable terms of the
We have seen many instances where parties have not given this
sufficient consideration and have just said that it is the consent
for a certain gross floor area or for a particular number of units
(without specifying size or bedroom configuration) or for
During the negotiation process, the parties have to put their
expectations with regards to the development consent terms "on
the table" and make sure that everyone agrees with what the
minimum acceptable approved development will be.
Give thought to other terms and conditions which will issue in
the development consent other than the basic consent for the type
of development which will be allowed.
For example, if contributions are above a certain level, if
there are unusual conditions imposed in relation to the manner of
construction or preservation of heritage items which would greatly
increase the expected costs of the development, then these
conditions may be unacceptable to one or more parties.
One of the most important things with these type of conditions
There must be benchmarks for not only obtaining a consent but
for various steps in the consent process so that parties are not
bound to an agreement for an unreasonably long period of time if it
becomes apparent through the process that the consents will not or
Acting in haste may mean repenting at leisure
Unfortunately these matters are often not given sufficient
attention and consideration by the parties in the rush to "get
the deal done". However, this is time well spent, as otherwise
one or more parties may live to regret the consequences of a
rushed, ill-considered and poorly defined condition.
If an owner wants to remove a caveat, issuing a lapsing notice is a quick and easy way to shift the problem to the caveator.
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